<PAGE>

                                                              Page 1 of 30 pages

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D. C. 20549



                                   FORM 10-Q

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
       ACT OF 1934

                                      OR

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
       EXCHANGE ACT OF 1934

For Transition Period from ________________ to __________________

For Quarter Ended September 30, 2001           Commission File Number 1-5112

                               ETHYL CORPORATION
                               -----------------
            (Exact name of registrant as specified in its charter)

           VIRGINIA                                    54-0118820
-------------------------------                        ----------
(State or other jurisdiction of                     (I.R.S. Employer
 incorporation or organization)                    Identification No.)


330 SOUTH FOURTH STREET
P. O. BOX 2189
RICHMOND, VIRGINIA                                         23218-2189
---------------------------------------                    ----------
(Address of principal executive offices)                   (Zip Code)

Registrant's telephone number, including area code - (804) 788-5000

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports); and (2) has been subject to such filing
requirements for the past 90 days.

                         Yes  X                 No ___
                             ---


Number of shares of common stock, $1 par value, outstanding as of October 31,
2001: 83,454,650.
<PAGE>

                               ETHYL CORPORATION


                                     INDEX

<TABLE>
<CAPTION>
                                                                                      Page
                                                                                     Number
                                                                                     ------
<S>                                                                                  <C>
PART I.  FINANCIAL INFORMATION

  ITEM 1.  Financial Statements

       Consolidated Statements of Income - Three Months and Nine Months
               Ended September 30, 2001 and 2000                                        3

       Consolidated Balance Sheets - September 30, 2001 and December 31, 2000           4

       Condensed Consolidated Statements of Cash Flows -
               Nine Months Ended September 30, 2001 and 2000                            5

       Notes to Financial Statements                                                   6-13

  ITEM 2.  Management's Discussion and Analysis of Results
                    of Operations and Financial Condition                             14-27

  ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk                   28


PART II.  OTHER INFORMATION

    ITEM 6.  Exhibits and Reports on Form 8-K                                           29

SIGNATURE                                                                               30
</TABLE>

                                       2
<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  Financial Statements

                      ETHYL CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
                    (In Thousands Except Per Share Amounts)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                               Three Months Ended           Nine Months Ended
                                                                  September 30                 September 30
                                                             ----------------------     -------------------------
                                                               2001          2000           2001          2000
                                                             --------      --------     ------------   ----------
<S>                                                          <C>           <C>          <C>            <C>
Net sales                                                    $160,729      $204,388        $ 543,858    $ 617,466
Cost of goods sold                                            133,745       159,205          482,420      483,578
                                                             --------      --------     ------------   ----------
   Gross profit                                                26,984        45,183           61,438      133,888

TEL marketing agreements services                               5,916        10,489           25,530       24,583

Selling, general, and administrative expenses                  16,653        19,932           51,840       57,932
Research, development, and testing expenses                    12,387        19,271           44,666       55,499
Special items income (expense), net                             3,070        27,185         (113,898)      73,604
                                                             --------      --------     ------------   ----------
   Operating profit (loss)                                      6,930        43,654         (123,436)     118,644

Interest and financing expenses                                 7,792         9,371           25,769       26,935
Other income (expense),  net                                       87        (1,725)            (308)        (668)
                                                             --------      --------     ------------   ----------
(Loss) income before income taxes                                (775)       32,558         (149,513)      91,041
Income tax (benefit) expense                                   (1,436)       11,002          (44,123)      32,392
                                                             --------      --------     ------------   ----------
Net income (loss)                                            $    661      $ 21,556       ($ 105,390)   $  58,649
                                                             ========      ========     ============   ==========
Basic and diluted earnings (loss) per share                  $    .01      $    .26       ($    1.26)   $     .70
                                                             ========      ========     ============   ==========
Shares used to compute basic and diluted
  earnings per share                                           83,455        83,463           83,455       83,465
                                                             ========      ========     ============   ==========

Cash dividends per share of common stock                     $      -      $      -        $       -    $   .1250
                                                             ========      ========     ============   ==========
</TABLE>

See accompanying notes to financial statements.

                                       3
<PAGE>

                      ETHYL CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                                (In thousands)

<TABLE>
<CAPTION>
                                                          September 30
                                                              2001          December 31
                                                           (unaudited)          2000
                                                          ------------     -------------
<S>                                                       <C>              <C>
                           ASSETS
Current assets:
   Cash and cash equivalents                               $   17,224       $     4,470
   Restricted cash                                              1,100             1,262
   Accounts receivable, less allowance for doubtful
      accounts ($905 - 2001; $908 - 2000)                     134,146           137,501
   Receivable - TEL marketing agreements services               6,811            12,555
   Inventories:
      Finished goods and work-in-process                       92,001           104,584
      Raw materials                                            14,184            15,562
      Stores, supplies and other                                8,072             9,540
                                                          ------------     -------------
                                                              114,257           129,686

   Deferred income taxes and prepaid expenses                   9,957            12,767
                                                          ------------     -------------
      Total current assets                                    283,495           298,241
                                                          ------------     -------------

Property, plant and equipment, at cost                        761,560           767,675
   Less accumulated depreciation and amortization             539,551           476,573
                                                          ------------     -------------
      Net property, plant and equipment                       222,009           291,102
                                                          ------------     -------------

Prepaid pension cost                                           19,526           224,892
Deferred income taxes                                          15,795                 -
Other assets and deferred charges                              80,276           100,166
Goodwill and other intangibles, net of amortization            78,938            87,238
                                                          ------------     -------------

Total assets                                               $  700,039       $ 1,001,639
                                                          ============     =============

             LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                        $   47,947       $    56,521
   Accrued expenses                                            39,807            49,140
   Debt payable                                               306,551            87,191
   Income taxes payable                                        54,065            11,480
                                                          ------------     -------------
      Total current liabilities                               448,370           204,332
                                                          ------------     -------------

Long-term debt                                                  5,684           356,053
Other noncurrent liabilities                                   99,914            99,297
Deferred income taxes                                               -            82,544

Shareholders' equity
   Common stock ($1 par value)
      Issued - 83,454,650 in 2001 and 2000                     83,455            83,455
   Accumulated other comprehensive loss                       (26,042)          (18,090)
   Retained earnings                                           88,658           194,048
                                                          ------------     -------------
                                                              146,071           259,413
                                                          ------------     -------------

Total liabilities and shareholders' equity                 $  700,039       $ 1,001,639
                                                          ============     =============
</TABLE>

See accompanying notes to financial statements.

                                       4
<PAGE>

                      ETHYL CORPORATION AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (In thousands, unaudited)

<TABLE>
<CAPTION>
                                                                             Nine Months Ended
                                                                                September 30
                                                                       ----------------------------
                                                                           2001            2000
                                                                       ------------    ------------
<S>                                                                    <C>             <C>
Cash and cash equivalents at beginning of year                          $    4,470      $   15,846
                                                                       ------------    ------------

Cash flows from operating activities:
   Net (loss) income                                                      (105,390)         58,649
   Adjustments to reconcile net (loss) income to cash flows from
    operating activities:
       Depreciation and amortization                                        85,685          50,431
       Accrued severance, early retirement, and other
          engine oil additives rationalization charges                      24,874               -
       Deferred income tax (benefit) expense                               (93,899)         22,690
       Prepaid pension cost                                                 (5,149)        (10,279)
       Pension reversion                                                   130,801               -
       Loss (gain) on pension contract settlements                          62,000         (78,518)
       Gain on sale of certain assets                                       (4,381)         (2,290)
       Asset write-off                                                           -           7,524
       Special retirement charge                                                 -           1,440
       Working capital decreases                                            50,098          20,837
       Other, net                                                            4,623          (1,625)
                                                                       ------------    ------------
          Cash provided from operating activities                          149,262          68,859
                                                                       ------------    ------------

Cash flows from investing activities:
   Capital expenditures                                                     (6,620)         (9,090)
   Proceeds from sale of certain assets                                     10,873           2,635
   Investment in Envera LLC                                                 (1,250)         (2,496)
   Prepayment for TEL marketing agreements services                              -         (39,448)
   Other, net                                                                  114             101
                                                                       ------------    ------------
          Cash provided from (used in) investing activities                  3,117         (48,298)
                                                                       ------------    ------------

Cash flows from financing activities:
   Repayment on term loans                                                (115,695)        (60,000)
   Net (repayments) borrowings on revolving credit agreement               (15,000)         55,000
   Debt issuance costs                                                     (10,128)              -
   Cash dividends paid                                                           -         (15,650)
   Other, net                                                                1,198            (378)
                                                                       ------------    ------------
          Cash used in financing activities                               (139,625)        (21,028)
                                                                       ------------    ------------

Increase (decrease) in cash and cash equivalents                            12,754            (467)
                                                                       ------------    ------------

Cash and cash equivalents at end of period                              $   17,224      $   15,379
                                                                       ============    ============
</TABLE>



See accompanying notes to financial statements.

                                       5
<PAGE>

                      ETHYL CORPORATION AND SUBSIDIARIES
                         NOTES TO FINANCIAL STATEMENTS
                                  (Unaudited)


1.   In the opinion of management, the accompanying consolidated financial
     statements of Ethyl Corporation and Subsidiaries contain all necessary
     adjustments, for the fair presentation of, in all material respects, our
     consolidated financial position as of September 30, 2001, as well as the
     consolidated results of operations and the consolidated cash flows for the
     nine-months ended September 30, 2001 and 2000. All adjustments are of a
     normal, recurring nature. These financial statements should be read in
     conjunction with the consolidated financial statements and related notes
     included in the December 31, 2000 Annual Report and Form 10-K. The results
     of operations for the nine-month period ended September 30, 2001 are not
     necessarily indicative of the results to be expected for the full year.

2.   Asset writedowns (through accelerated depreciation), severance, early
     retirement, and other costs related to the rationalization of our engine
     oil additives product lines were $500 thousand ($315 thousand after tax)
     for third quarter 2001 and $74.0 million ($46.7 million after tax or $.56
     per share) for nine months 2001. These costs are included in the
     Consolidated Statements of Income as follows:

<TABLE>
<CAPTION>
                                                                            (in millions)
                                                                Three Months             Nine Months
                                                                   Ended                    Ended
                                                             September 30, 2001       September 30, 2001
                                                             ------------------       ------------------
     <S>                                                     <C>                      <C>
     Cost of goods sold                                              $   -                   $ 41.8
     Selling, general, and administrative expenses                      .1                       .1
     Research, development, and testing expenses                         -                      3.0
     Special items expense, net                                         .4                     29.1
                                                                     -----                   ------
                                                                     $  .5                   $ 74.0
                                                                     =====                   ======
</TABLE>

     Cost of goods sold includes a $41.8 million charge ($26.1 million after tax
     or $.31 per share) for the year 2001 for a portion of the accelerated
     depreciation of the engine oil additives facilities that were indefinitely
     idled this year, as well as the writedown of certain inventories and
     shutdown costs.

     Selling, general, and administrative expenses include a $135 thousand
     charge ($88 thousand after tax) for third quarter and nine months for a
     portion of the accelerated depreciation and related expenses.

     Research, development, and testing expenses include a charge of $3.0
     million ($1.9 million after tax or $.03 per share) for the year 2001 for a
     portion of the accelerated depreciation of the research and development
     facilities that were shutdown in the second quarter 2001, as well as the
     writedown of certain inventories.

                                       6
<PAGE>

     We included severance, early retirement, and other expenses in special
     items income (expense), net. See Note 5.

     Depreciation and amortization in the Condensed Consolidated Statement of
     Cash Flows includes accelerated depreciation of $41.2 million due to the
     shortened lives of certain engine oil additives assets. Management
     considered if the indefinitely idled assets were impaired and concluded
     in the first quarter that these assets should be depreciated over the
     remaining useful lives through the second quarter 2001 closure dates.

3.   During nine months ended September 30, 2001, TEL inventory quantities were
     reduced which resulted in a liquidation of LIFO inventory layers. The
     effect of the liquidation was to decrease cost of goods sold by $1.5
     million and increase net income by $900 thousand or $.01 per share. During
     2000, TEL inventories were also reduced. The effect of the liquidation was
     to decrease cost of goods sold by $1.1 million and increase net income by
     $700 thousand or $.01 per share.


4.   The tables below show our consolidated net sales by segment, operating
     profit by segment, and reconciliation to (loss) income before income taxes.

                             Net Sales By Segment
                                 (in millions)

<TABLE>
<CAPTION>
                                       Third Quarter             Nine Months
                                     2001         2000         2001       2000
                                     ----         ----         ----       ----
     <S>                            <C>          <C>          <C>        <C>
     Petroleum additives            $158.8       $198.2       $529.2     $597.9
     Tetraethyl lead                   1.9          6.2         14.7       19.6
                                    ------       ------       ------     ------
     Consolidated net sales         $160.7       $204.4       $543.9     $617.5
                                    ======       ======       ======     ======
</TABLE>


                                       7
<PAGE>

                           Segment Operating Profit
                                 (in millions)

<TABLE>
<CAPTION>
                                                              Third Quarter                Nine Months
                                                            2001           2000         2001         2000
                                                            ----           ----         ----         ----
         <S>                                          <C>              <C>           <C>            <C>
         Petroleum additives before
           nonrecurring items                          $ 6.2           $    8.8       $  25.0       $ 32.6
         Nonrecurring income (expense)                   2.9                  -         (70.6)        (7.5)
                                                      ------           --------       -------       ------
            Total petroleum additives                    9.1                8.8         (45.6)        25.1
         Tetraethyl lead                                 3.4               12.9          24.0         27.4
                                                      ------           --------       --------      ------
         Segment operating profit (loss)                12.5               21.7         (21.6)        52.5
         Corporate unallocated expense                  (3.7)              (6.5)        (14.7)       (19.3)
         Interest expense                               (7.8)              (9.4)        (25.8)       (26.9)
         Pension settlement income
            (expense) including 2001
            excise tax provision                           -               28.6         (88.2)        78.5
         Demutualization income                            -                  -             -          4.0
         Other (expense) income, net                    (1.8)              (1.8)          0.8          2.2
                                                      ------           --------       -------       ------
         (Loss) income before income taxes             $(0.8)          $   32.6       $(149.5)      $ 91.0
                                                      ======           ========       =======       ======
</TABLE>

5.       Special items income (expense), net for the third quarter of 2001
         includes a gain of $3.4 million ($3.3 million after tax or $.04 per
         share) related to the sale of certain assets in Bracknell, England.

         The special items (expense) income, net for the third quarter of 2000
         included a net benefit of $28.6 million income ($18.2 million after tax
         or $.22 per share) from the settlement of certain pension contracts
         resulting in the recognition of a noncash gain offset by a special
         retirement charge of $1.4 million ($917 thousand after tax or $.01 per
         share).

         The nine months 2001 amounts include a charge of $29.1 million ($18.6
         million after tax or $.22 per share) for severance, early retirement,
         and other expenses related to our engine oil additives rationalization;
         the noncash charge of $62.0 million ($42.7 million after tax or $.51
         per share) for the pension plan transaction and a $26.2 million charge
         ($26.2 million after tax or $.31 per share) for excise tax on the
         pension reversion partially offset by the $3.4 million ($3.3 million
         after tax or $.04 per share) gain on the sale of assets in Bracknell,
         England.

         The nine months 2000 amounts consisted of $78.5 million income ($49.8
         million after tax or $.60 per share) related to settlements of certain
         pension contracts resulting in the recognition of noncash gains in the
         first and third quarters as well as $4.0 million income ($2.6 million
         after tax or $.03 per share) related to the demutualization of MetLife,
         Inc. in the second quarter. These items were partly offset by a $7.5
         million first quarter charge ($4.8 million after tax or $.06 per share)
         related to the write-off of plant assets and the third quarter special
         retirement charge of $1.4 million ($917 thousand after tax or $.01 per
         share).

                                       8
<PAGE>

         As part of the engine oil additives rationalization, we announced an
         involuntary severance program that resulted in a reduction of 319
         positions. Included were staff at the engine oil additives plants being
         indefinitely idled, staff at our Bracknell and Richmond research
         facilities, and corporate staff. We also announced a voluntary early
         retirement program for most domestic salaried employees over age 52.
         The involuntary severance program included 98 employees who were
         eligible for early retirement. Thirty-two additional employees, whose
         positions were not eliminated, voluntarily retired. Of the 351
         employees who were involuntarily severed or voluntarily retired, 138
         positions were in manufacturing, 115 were in research and testing, and
         98 were administrative positions. Most of the nonmanufacturing
         terminations were effective April 30, 2001; however, some occurred
         later in the second and third quarters. For the nine months 2001, we
         paid $8.8 million for costs related to the employees who were
         terminated by September 30, 2001 as well as other shutdown costs. We
         paid $3.0 million during the third quarter 2001.

         The recognition of the $78.5 million pension-related gain in 2000 was
         due to an election made regarding certain contracts in our pension
         plan. This election resulted in the settlement of liabilities for
         certain pension contracts and the recognition of a significant gain on
         our pension assets. The settlement gain had no cash effect nor did any
         retiree benefits change.

         The charge of $7.5 million included in nine months 2000 special items
         was for the write-off of the production assets of a previously idled
         petroleum additives facility in Orangeburg, South Carolina. There were
         no employee or other incremental costs included in this charge. As part
         of our ongoing cost improvement process, during first quarter 2000 we
         reviewed a third party supply contract for product as well as our
         manufacturing facilities. We concluded that the market for product
         previously produced at this facility had not grown as anticipated and
         excess supply and production facilities were in place. Further, there
         were no specific market changes expected to impact these conditions. As
         a result of this review, we cancelled our original supply contract in
         first quarter 2000, restructured, and entered a new, more limited
         supply agreement. There were no one-time charges related to the
         contract change. We also decided to permanently idle this manufacturing
         facility and wrote off the book value of these assets in the first
         quarter 2000.


6.       Other income (expense), net for the third quarter 2001 was $87 thousand
         income. Other income (expense), net totaled $1.7 million expense for
         the third quarter 2000 and consisted primarily of a $1.8 million charge
         for our percentage share of the equity loss of Envera, LLC (Envera).
         Envera, which merged with ChemConnect, Inc., is a global
         electronic-marketplace for business to business transactions and
         services.

         Other income (expense), net for nine months 2001 was $300 thousand
         expense and included $1.8 million for our percentage share of the
         equity losses of Envera. Also included in nine months 2001 is the $1.5
         million of expenses related to the refinancing of our debt, as well as
         the $1.0 million gain on the sale of a nonoperating asset.

         The $1.0 million gain ($600 thousand after tax or $.01 per share) on
         the sale of the nonoperating asset was for the sale of certain real and
         personal property in King William,

                                       9
<PAGE>

         Virginia, to Old Town, LLC (Old Town). Old Town is a separate legal
         entity organized by members of the Gottwald family. The property was
         sold for $2.9 million. We will continue to manage the property for Old
         Town. Management expenses incurred will be partially offset by any
         income generated by use of the property.

         Other income (expense), net for nine months 2000 includes a second
         quarter gain on the sale of a nonoperating asset of $2.3 million ($1.4
         million after tax or $.02 per share) which was partially offset by a
         $1.8 million charge related to the equity loss in Envera.

7.       Long-term debt consisted of the following:

                                                         (in thousands)
                                                     September 30   December 31
                                                         2001           2000
                                                         ----           ----

         New term loan                                $ 205,691     $       -
         Revolving credit agreement                       5,000       250,000
         Term loan agreement                             88,614       180,000
         Medium-term notes due through 2001               6,750         6,750
                                                      ---------     ---------
           Total long-term debt                         306,055       436,750
           Obligations under capital lease                6,180         6,526
             Less unamortized discount                        -           (32)
                                                      ---------     ---------
           Net long-term debt                           312,235       443,244
             Less current portion                      (306,551)      (87,191)
                                                      ---------     ---------
           Long-term debt                             $   5,684     $ 356,053
                                                      =========     =========

         On April 10, 2001, we entered into the First Amended and Restated
         Credit Agreement (the New Credit Facility) with our lenders as a result
         of not being in compliance with one of the covenants of the previous
         agreement at the end of the first quarter 2001.

         The New Credit Facility includes a revolving line of credit of $170
         million (including a letter of credit sub-facility), the remaining
         portion of the original term loan, and a new term loan of $230 million.
         Since we did not enter into an asset-based secured financing facility
         before May 31, 2001 which would have been utilized to reduce the term
         loan and revolving debt by $115 million, we paid an additional fee of
         $675 thousand.

         The key provisions of the New Credit Facility include collateralizing
         substantially all of our assets in the United States and higher
         interest rates. Mandatory prepayments on debt are required from excess
         cash flow, asset dispositions, distributions from our pension plan, and
         certain other transactions. The payment of dividends is not permitted
         and investments, as well as capital expenditures are limited. The New
         Credit Facility includes certain financial covenants, including among
         others, minimum EBITDA, interest coverage, and leverage coverage
         ratios.

         The current maturity date of our bank loans is August 28, 2002. We are
         discussing an extension of the maturity date of these loans with our
         lenders. While it is our intent and expectation to extend these loans,
         the amounts outstanding are classified as current on our financial
         statements in accordance with generally accepted accounting principles.
         We believe we will complete an agreement on these bank loans by the end
         of this year. However, there is no assurance that an agreement will be
         accomplished. This would cause us to pursue other alternatives. While
         we believe alternatives, if required, would be available to us and
         achievable, there can be no assurance of their success. The financial
         statements do not include any adjustments that might result from the
         outcome of this uncertainty.

                                       10
<PAGE>

         If unforeseen events or business conditions restrict us from meeting
         our targeted financial results, we have alternative plans, including
         additional asset sales and reductions in working capital that we
         believe would improve our ability to comply with the debt covenants.
         However, in the event that we are not in compliance with debt covenants
         at some future date, we would pursue various alternatives. These
         alternatives may include, among other things, refinancing of debt or
         obtaining covenant amendments or waivers. While we believe we could
         successfully complete alternative arrangements if necessary, there can
         be no assurances that such alternatives would be available or that we
         would be successful in their implementation.

8.       The components of comprehensive income consist of the following:


<TABLE>
<CAPTION>
                                                                   Three Months Ended              Nine Months Ended
                                                                      September 30                   September 30
                                                                   2001            2000            2001           2000
                                                                   ----            ----            ----           ----
         <S>                                                    <C>            <C>             <C>            <C>
         Net income (loss)                                         $  661       $ 21,556       $(105,390)     $ 58,649
         Other comprehensive (loss) income, net of tax
            Unrealized (loss) gain on marketable
              equity securities                                      (717)         8,172          (5,486)        7,610
            Foreign currency translation adjustments                2,158         (3,881)         (2,466)       (8,129)
            Minimum pension liability adjustment                        -              -               -        (1,811)
            Unrealized gain on derivative instruments                   -            405               -         1,752
                                                                   ------       --------       ---------      --------
         Other comprehensive income (loss)                          1,441          4,696          (7,952)         (578)
                                                                   ------       --------       ---------      --------
         Comprehensive income (loss)                               $2,102       $ 26,252       $(113,342)     $ 58,071
                                                                   ======       ========       =========      ========
</TABLE>

         Nine months 2000 unrealized gain on marketable equity securities
         includes a reclassification adjustment for the gain included in other
         (expense) income, net resulting from the sale of securities of $1.4
         million (net of tax).

         The components of accumulated other comprehensive (loss) income consist
         of the following:

<TABLE>
<CAPTION>
                                                                       September 30      December 31
                                                                           2001             2000
                                                                           ----             ----
         <S>                                                           <C>              <C>
         Unrealized (loss) gain on marketable equity securities         $ (2,683)         $  2,803
         Minimum pension liability adjustment                               (907)             (907)
         Foreign currency translation adjustments                        (22,452)          (19,986)
                                                                        --------          --------
                Accumulated other comprehensive (loss)                  $(26,042)         $(18,090)
                                                                        ========          ========
</TABLE>

9.       At December 31, 2000, we terminated an overfunded U.S. salaried
         employee pension plan. Ethyl received regulatory approval for the plan
         termination in second quarter 2001. The proceeds from the terminated
         plan amount to $178.9 million. After fully funding a

                                       11
<PAGE>

         new pension plan for U.S. salaried employees which has comparable
         provisions and benefit formula, we received $130.8 million in third
         quarter 2001 which represent the reversion of pension assets. The
         reversion amount was subject to the usual corporate income taxes, as
         well as a 20% federal excise tax. Total federal income, state income,
         and excise taxes amounted to $76.8 million. The excise tax of $26.2
         million was paid in the third quarter 2001. The net cash received,
         after the payment of excise taxes, amounted to just over $104.0 million
         and was used to pay down our debt in the third quarter. Part of this
         debt reduction is temporary, as the income tax associated with the
         receipt of the pension funds is due in December.

10.      On May 30, 2001, Bruce C. Gottwald announced his retirement as Chief
         Executive Officer, effective June 1, 2001. He will continue as a
         director and Chairman of the Board of Directors.

         The Board of Directors elected Thomas E. (Teddy) Gottwald to the role
         of Chief Executive Officer, effective June 1, 2001. Teddy Gottwald
         joined Ethyl Corporation in 1984 in the Plastics Division. He was
         elected a Vice President of Ethyl and named divisional president of our
         Petroleum Additives Division in 1991. Mr. Gottwald was elected
         President and Chief Operating Officer of Ethyl Corporation in 1994. He
         also serves as a director and member of the Executive Committee.

11.      The Financial Accounting Standards Board (FASB) issued four new
         Statements of Financial Accounting Standards (SFAS).

         SFAS 141 "Business Combinations", issued in July 2001, requires that
         the purchase method of accounting be used for all business combinations
         initiated after June 30, 2001. The pooling-of-interests method of
         accounting is no longer allowed. We do not expect this statement to
         have a significant impact on Ethyl's financial statements.

         SFAS 142 "Goodwill and Other Intangible Assets", issued in July 2001,
         is effective for fiscal years beginning after December 15, 2001. The
         statement eliminates the amortization of goodwill as of January 1,
         2002. In addition, the statement no longer requires that intangibles be
         amortized if the life of the intangible is determined to be indefinite.
         Further, goodwill and intangibles will be reviewed at least annually
         for possible impairment. While we will discontinue goodwill
         amortization on December 31, 2001, we are currently evaluating the full
         impact of this statement.

         SFAS 143 "Accounting for Asset Retirement Obligations" was issued in
         August 2001. This statement addresses the obligations and asset
         retirement costs associated with the retirement of tangible long-lived
         assets. It requires that the fair value of the liability for an asset
         retirement obligation be recorded when incurred instead of over the
         life of the asset. The asset retirement costs must be capitalized as
         part of the carrying value of the long-lived asset. If the liability is
         settled for an amount other than the recorded balance, either a gain or
         loss will be recognized at settlement. This statement is effective for
         fiscal years beginning after June 15, 2002. We have not completed the
         necessary analysis, and therefore cannot yet assess the potential
         impact on our financial statements.

                                       12
<PAGE>

         SFAS 144 "Accounting for the Impairment or Disposal of Long-Lived
         Assets" was issued in October 2001 and is effective for fiscal years
         beginning after December 15, 2001. While this statement supercedes SFAS
         121 "Accounting for the Impairment of Long-Lived Assets and for
         Long-Lived Assets to Be Disposed Of", SFAS 144 retains the framework
         established in SFAS 121 and addresses implementation issues. SFAS 144
         also supercedes Accounting Principles Board Opinion Number 30
         "Reporting Results of Operations-Reporting the Effects of Disposal of a
         Segment of a Business" and addresses the accounting for disposal of
         long-lived assets of a discontinued operation. Generally SFAS 144
         requires that impaired assets or assets to be disposed of, whether
         reported in continuing operations or discontinued operations, be
         recorded at the lower of carrying amount or fair value less cost to
         sell. We are currently evaluating the impact of this statement.

                                       13
<PAGE>

ITEM 2.   Management's Discussion and Analysis of
          ---------------------------------------
          Results of Operations and Financial Condition
          ---------------------------------------------

     The following is management's discussion and analysis of certain
     significant factors affecting our results of operations and changes in
     financial condition since December 31, 2000. Our reportable segments,
     petroleum additives and tetraethyl lead (TEL), are strategic business units
     that we manage separately.

     Some of the information presented in the following discussion constitutes
     forward-looking comments within the meaning of the Private Securities
     Litigation Reform Act of 1995. The forward-looking comments may focus on
     future objectives or expectations about future performance and may include
     statements about trends or anticipated events.

     We believe our forward-looking comments are based on reasonable
     expectations and assumptions, within the bounds of what we know about our
     business and operations. However, we offer no assurance that actual results
     will not differ materially from our expectations due to uncertainties and
     factors that are difficult to predict and beyond our control. We identify
     certain, but not all, of these factors in the Review of Operations in our
     2000 Annual Report and incorporate the same herein by reference.

     Results of Operations
     ---------------------
     Net Sales
     ---------
     Our consolidated net sales for the third quarter 2001 amounted to $160.7
     million, representing a decrease of 21% from the 2000 level of $204.4
     million. Consolidated net sales for nine months 2001 were $543.9 million,
     or a 12% decrease from the nine months 2000 amount of $617.5 million. The
     table below shows our consolidated net sales by segment.

                             Net Sales By Segment
                                 (in millions)

                                  Third Quarter          Nine Months
                                 2001        2000     2001      2000
                                 ----        ----     ----      ----
     Petroleum additives        $158.8     $198.2    $529.2    $597.9
     Tetraethyl lead               1.9        6.2      14.7      19.6
                                ------     ------    ------    ------
     Consolidated net sales     $160.7     $204.4    $543.9    $617.5
                                ======     ======    ======    ======

                                       14
<PAGE>

         Petroleum Additives Segment
         ---------------------------
         Petroleum additives net sales in the third quarter 2001 of $158.8
         million were down $39.4 million (20%) from 2000. Lower shipments
         resulted in lower sales of $38.8 million, while overall selling prices
         were just about even with third quarter 2000. The nine months 2001 net
         sales were $68.7 million (11%) lower than 2000. Lower shipments
         resulted in lower sales of $79.6 million partially offset by an $10.9
         million benefit from higher selling prices.

         The lower volumes shipped in both the third quarter and nine months
         periods reflect the impact of the previously announced loss of three
         major engine oil additives customers. Shipments of engine oil additives
         products to these customers substantially ceased by the end of the
         second quarter.

         TEL Segment
         -----------
         Most of the TEL marketing activity is through the TEL marketing
         agreements with Octel and Alcor, under which we do not record the sales
         transactions. Therefore, the TEL net sales reflected in the table above
         were made in areas not covered by the agreements, as well as to Octel
         under the terms of the agreements.

         The decrease in TEL sales in the third quarter 2001 compared to third
         quarter 2000 was primarily the result of $2.9 million lower sales to
         Octel in 2001. During the first quarter 2001, Octel purchased
         substantially all of the remaining inventory they are required to
         purchase under the agreements. Sales, other than to Octel, were $1.4
         million lower for third quarter 2001 than third quarter 2000.

         TEL net sales decreased $4.9 million (25%) from nine months 2000 to
         nine months 2001. Sales to Octel decreased $1.0 million during this
         period reflecting the first quarter 2001 completion of Octel's
         commitment under the agreements to purchase inventory from Ethyl. The
         decrease in TEL sales, excluding Octel, reflects the expected and
         continuing market decline and shipment patterns.

         Segment Operating Profit
         ------------------------
         Ethyl evaluates the performance of petroleum additives and TEL based on
         segment operating profit. Corporate departments and other expenses
         outside the control of the segment manager are not allocated to segment
         operating profit. Depreciation on segment property, plant, and
         equipment and amortization of segment intangible assets and the
         prepayment for services are included in the operating profit of each
         segment.

         Third quarter 2001 segment operating profit was $12.5 million and
         included nonrecurring income, net of $2.9 million. The nonrecurring
         items were for a gain on the sale of assets in Bracknell, England of
         $3.4 million, which was slightly offset by costs of $500 thousand
         related to further cost reduction initiative expenses. Operating profit
         for the same 2000 period was $21.7 million. Excluding the nonrecurring
         charge in 2001, combined segment operating profit was $9.6 million.

         Nine months 2001 segment operating loss was $21.6 million including a
         nonrecurring expense, net of $70.6 million. The nonrecurring items were
         for costs related to rationalization of our engine oil additives
         business of $74.0 million, which was partially offset by the $3.4
         million gain on the Bracknell assets. Operating profit nine months

                                       15
<PAGE>

         2000 was $52.5 million and included a nonrecurring charge of $7.5
         million for the write-off of a previously idled petroleum additives
         manufacturing facility. Excluding these nonrecurring items, combined
         segment operating profit was $49.0 million for nine months 2001 and
         $60.0 million for the same period last year.

         It is the nature of the petroleum additives business that new business
         takes some time to gain and then to begin shipping product. Recovering
         from the loss of significant volume early this year, we have made solid
         gains in our product lines and regions. We expect to see earnings
         improvements in the fourth quarter as more of these gains begin
         shipping.

         Operating profit by segment and reconciliation to income before income
         taxes is shown below followed by a review of the results.

                            Segment Operating Profit
                                 (in millions)

<TABLE>
<CAPTION>
                                                  Third Quarter            Nine Months
                                                2001        2000         2001        2000
                                                ----        ----         ----        ----
<S>                                             <C>         <C>       <C>           <C>
         Petroleum additives before
           nonrecurring items                   $  6.2      $  8.8    $   25.0      $  32.6
         Nonrecurring income (expense)             2.9           -       (70.6)        (7.5)
                                                ------      ------    --------      -------
           Total petroleum additives               9.1         8.8       (45.6)        25.1
         Tetraethyl lead                           3.4        12.9        24.0         27.4
                                                ------      ------    --------      -------
         Segment operating profit (loss)          12.5        21.7       (21.6)        52.5
         Corporate unallocated expense            (3.7)       (6.5)      (14.7)       (19.3)
         Interest expense                         (7.8)       (9.4)      (25.8)       (26.9)
         Pension settlement income
           (expense) including 2001
           excise tax provision                      -        28.6       (88.2)        78.5
         Demutualization income                      -           -           -          4.0
         Other (expense) income, net              (1.8)       (1.8)        0.8          2.2
                                                ------      ------    --------      -------
         (Loss) income before income taxes      $ (0.8)     $ 32.6    $ (149.5)     $  91.0
                                                ======      ======    ========      =======
</TABLE>

         Petroleum Additives Segment
         ---------------------------
         Third Quarter 2001 vs. Third Quarter 2000 - Excluding nonrecurring
         -----------------------------------------
         items, petroleum additives operating profit for the third quarter 2001
         of $6.2 million decreased 30% from third quarter 2000 operating profit
         of $8.8 million on the same basis. Including the nonrecurring items,
         petroleum additives third quarter 2001 operating profit was $9.1
         million.

         The decrease in operating profit in the third quarter included
         unfavorable results in our engine oil additives business as adverse
         conditions in this market persist which combined with the impact of
         previously announced business losses in this product line for the
         period, more than offset the benefit of our cost reduction program.
         Excluding the engine oil additives business, petroleum additives
         operating profit showed modest increases when comparing third quarter
         2001 with the same period in 2000.

         In addition to lost engine oil additives business and therefore,
         significantly lower engine oil additives shipments, the lower profits
         for the third quarter 2001, excluding the nonrecurring items, resulted
         from slightly higher raw material costs. These were partially offset by
         the favorable impact of foreign currency, as well as lower selling,
         general, and administrative expenses (SG&A) and research, development,
         and testing expenses (R&D).

                                       16
<PAGE>

     The nonrecurring items in the third quarter 2001 amounted to $2.9 million
     income. The gain on the sale of Bracknell, England assets amounted to $3.4
     million. This was partially offset by a $500 thousand charge related to
     further cost reduction initiative expenses. These costs included a noncash
     charge of $100 thousand for accelerated depreciation, as well as certain
     other related costs. Also included is $400 thousand for severance and early
     retirement.

     R&D expenses in the petroleum additives segment for the third quarter 2001
     decreased 36% compared to the 2000 period. The decrease in R&D expenses
     reflects the benefit our of cost reduction initiative undertaken as part of
     our engine oil additives rationalization. This included the consolidation
     of more of the R&D activities into our modern facilities in Richmond,
     Virginia, which improves efficiencies of operation. In addition, staff
     reductions, as well as being able to internally perform more testing which
     previously had been done by external labs, has contributed to the
     significantly lower R&D expenses. Finally, last year we completed a
     significant portion of the testing related to certain additive product
     specifications.

     Selling, general, and administrative expenses combined with research,
     development, and testing expense, as a percentage of net sales, decreased
     from 16.8% for the third quarter 2000 to 15.0% in the same period this
     year. This decrease reflects the effect of lower SG&A and R&D expenses due
     to the impact of the cost reduction program.

     Nine Months 2001 vs. Nine Months 2000 - Excluding nonrecurring items,
     -------------------------------------
     petroleum additives operating profit for the nine months 2001 of $25.0
     million decreased 23% from nine months 2000 operating profit of $32.6
     million on the same basis. Including nonrecurring charges, the petroleum
     additives operating loss for nine months 2001 was $45.6 million as compared
     to operating profit of $25.1 million for nine months 2000.

     Similarly to the third quarter, the overall decrease in operating profit
     for the nine months reflects the impact of our previously announced
     loss of business in engine oil additives. Our cost reduction efforts
     were essentially completed at the end of the second quarter 2001, and we
     are beginning to realize the full benefit of these efforts.

     The lower profits, excluding nonrecurring charges, for nine months 2001
     resulted primarily from higher raw material costs, as well as significantly
     lower engine oil additives shipments. Unfavorable foreign currency effects
     also contributed to the lower profits. These were partially offset by
     higher selling prices and the benefit of our cost reduction initiatives
     resulting in lower selling, general, and administrative expenses (SG&A) and
     research, development, and testing expenses (R&D).

     The nonrecurring charges for our engine oil additives product line for the
     nine months 2001 were $70.6 million. These costs included a noncash charge
     of $42.5 million for a portion of the accelerated depreciation of the
     engine oil additives facilities, which were indefinitely idled in the
     second quarter 2001, as well as certain other related costs. Also included
     is $29.1 million for severance, early retirement, and other expenses, as
     well as $2.4 million for shutdown costs. These are offset by the $3.4
     million gain on the sale of

                                       17
<PAGE>

         Bracknell, England assets. The nonrecurring charge in the nine months
         2000 of $7.5 million related to the first quarter writedown of an idled
         petroleum additives facility.

         R&D expenses in the petroleum additives segment for nine months 2001
         decreased 25% compared to nine months 2000. The decrease is the result
         of the same factors discussed in the third quarter review above.

         Selling, general, and administrative expenses combined with research,
         development, and testing expense, as a percentage of net sales,
         decreased from 16.3% for the nine months 2000 to 14.9% for nine months
         2001. This decrease reflects the effect of lower SG&A and R&D due to
         the impact of the cost reduction program.

         TEL Segment
         -----------
         Our TEL operating profit for the third quarter 2001 amounted to $3.4
         million and included $5.9 million from the TEL marketing agreements. In
         comparison, third quarter 2000 operating profit was $12.9 million
         including $10.4 million from the TEL marketing agreements.

         Nine months 2001 operating profit was $24.0 million and included $25.5
         million from the marketing agreements, as well as a benefit of $1.5
         million from the liquidation of LIFO inventory. Operating profit for
         the nine months 2001 reflects the sale of substantially the entire
         remaining inventory that Octel is required to purchase under the
         agreements. Nine months 2000 operating profit was $27.4 million and
         included $24.6 million from the marketing agreements, as well as $1.1
         million benefit from the liquidation of LIFO inventory.

         The reduction in operating profit from the marketing agreements for
         third quarter 2001 compared to third quarter 2000 was due to decline in
         volumes shipped. This was the result of normal fluctuations in shipping
         patterns, as well as the overall decline in the demand for lead. While
         volumes under the marketing agreements were also lower for nine months
         2001 as compared to the same 2000 period, operating profit for nine
         months 2001 was slightly higher primarily reflecting the impact of
         higher product pricing, as well as customer mix.

         As the TEL market continues to decline, the quarter to quarter results
         could fluctuate at a higher rate due to the timing of customer
         shipments.

         TEL results include the cost of certain facilities that are not
         allocable to the TEL marketing agreements.



         The following discussion references the Consolidated Financial
         Statements beginning on page 3 of this Form 10-Q.

         Special Items Income (Expense), Net
         -----------------------------------
         Third Quarter 2001 vs. Third Quarter 2000 - The special items income
         -----------------------------------------
         (expense), net for the third quarter 2001 was income of $3.1 million
         and included a gain of $3.4 million

                                       18
<PAGE>

         related to the sale of certain assets in Bracknell, England. Cost
         reduction initiative charges amounted to $355 thousand.

         There were $100 thousand cost reduction initiative expenses not
         included in special items, which we reported in selling, general, and
         administrative expenses.

         The special items income (expense), net for third quarter 2000 totaled
         $27.2 million income. A settlement of pension contracts resulted in the
         recognition of a noncash gain of $28.6 million, which was offset by a
         special retirement charge of $1.4 million.

         Nine Months 2001 vs. Nine Months 2000 - The special items income
         -------------------------------------
         (expense), net for nine months 2001 was a charge of $113.9 million for
         pension-related charges and engine oil additives rationalization
         charges which were partially offset by the gain on the sale of assets
         in Bracknell, England.

         The termination of our U.S. salaried pension plan and the subsequent
         settlement of the pension contracts resulted in a noncash charge of
         $62.0 million. The excise tax on the reversion of the pension assets
         was $26.2 million. The charge for severance, early retirement, and
         other expenses related to our engine oil additives business amounted to
         almost $29.1 million.

         There were $44.9 million engine oil additives-related costs not
         included in special items of which we reported $41.8 million in cost of
         goods sold; $3.0 million in research, development, and testing
         expenses; and $100 thousand in selling, general, and administrative
         expenses.

         The special items income (expense), net for nine months 2000 totaled
         $73.6 million income. Settlements of certain pension contracts resulted
         in the recognition of noncash gains in the first and third quarters
         totalling $78.5 million. In addition, the second quarter
         demutualization of MetLife, Inc. resulted in $4.0 million income. These
         were partly offset by a $7.5 million first quarter charge for the
         write-off of the idled Orangeburg, South Carolina, petroleum additives
         manufacturing facility and the third quarter special retirement charge
         of $1.4 million.

         Interest and Financing Expenses
         -------------------------------
         Third quarter 2001, interest and financing expenses were $7.8 million
         as compared to $9.4 million in 2000. Lower average debt resulted in a
         decrease in interest and financing expenses of $2.5 million, while a
         lower effective interest rate resulted in a decrease of $700 thousand.
         Higher fees and amortization of financing costs of $1.6 million
         partially offset these.

         Interest and financing costs for nine months 2001 were $25.8 million as
         compared to $26.9 million for the same period last year. Again, lower
         average debt caused a decrease of $4.0 million and a lower effective
         interest rate resulted in a decrease of $400 thousand. This was
         partially offset by higher fees and amortization resulting in an
         increase of $3.3 million.

         Interest costs under the credit facility are based on market rates plus
         a premium. While the premium charged under our current credit facility
         entered into in April 2001 is higher

                                       19
<PAGE>

         than was charged under our previous facility, the recent reductions in
         the market rates have resulted in our interest and financing costs
         being lower than if market rates had remained unchanged. In addition,
         interest and financing costs have decreased due to the significant
         reduction in outstanding debt. If market rates begin to increase, our
         interest and financing costs will also rise on the remaining debt.

         Other Income (Expense), Net
         ---------------------------
         Other income (expense), net for the third quarter 2001 was $87 thousand
         income and included a number of small items. Other income (expense),
         net totaled $1.7 million expense for the third quarter 2000 including
         $1.8 million for our percentage share of the equity losses of Envera
         LLC (Envera). Envera, which merged with ChemConnect, Inc., is a global
         electronic-marketplace for business to business transactions and
         services.

         Nine months 2001 amounted to $300 thousand expense and included $1.8
         million for our percentage share of the equity losses of Envera. Also
         included in nine months 2001 is the $1.5 million of expenses related to
         the refinancing of our debt, as well as the $1.0 million gain on the
         sale of a nonoperating asset. Other income (expense), net for nine
         months 2000 was $700 thousand expense and included a gain of about $2.3
         million on the sale of nonoperating assets, which was partially offset
         by $1.8 million related to the equity loss in Envera.

         The $1.0 million gain ($600 thousand after tax or $.01 per share) in
         2001 on the sale of a nonoperating asset was for the sale of certain
         real and personal property in King William, Virginia, to Old Town, LLC
         (Old Town). Old Town is a separate legal entity organized by members of
         the Gottwald family. The property was sold for $2.9 million. We will
         continue to manage the property for Old Town. Management expenses
         incurred will be partially offset by any income generated by use of the
         property.

         Income Taxes
         ------------
         Income taxes were a $1.4 million benefit for the third quarter 2001 and
         an $11.0 million expense for the third quarter 2000. The change in our
         (loss) income before income taxes resulted in a decrease of $11.2
         million in income taxes. In addition a higher effective income tax rate
         on the loss in third quarter 2001 resulted in $1.2 million of lower
         income taxes. We received preferential tax treatment related to the
         gain on the sale of assets in Bracknell, England. Excluding the
         preferential treatment, the effective income tax rate for the third
         quarter 2001 would have been 37.4%. The effective income tax rate was
         33.8% for the third quarter 2000.

         Income taxes were a benefit of $44.1 million for the nine months 2001
         as compared to expense of $32.4 million for nine months 2000. The
         change in our (loss) income before income taxes resulted in $85.6
         million of the decrease in income taxes. This was offset $9.1 million
         by the effect of a lower effective income tax rate in 2001. The
         effective income tax rate was 29.5% for nine months 2001 and 35.6% for
         nine months 2000. The lower effective income tax rate on this year's
         loss primarily reflects the nondeductible excise tax on the reversion
         of pension assets.

         Net Income (Loss)
         -----------------
         Excluding the nonrecurring items, our third quarter 2001 loss was $2.3
         million ($.02 per share) compared to earnings of $4.3 million ($.05 per
         share) for the 2000 period. Nine

                                       20
<PAGE>

         months 2001 earnings, excluding nonrecurring items, was $6.3 million
         ($.08 per share), while nine months 2000 earnings, on the same basis,
         were $10.5 million ($.12 per share).

         Ethyl's net income for third quarter 2001, including nonrecurring
         items, was $700 thousand ($.01 per share) as compared to net income of
         $21.6 million ($.26 per share) for third quarter 2000. Our net loss for
         nine months 2001, including nonrecurring charges, was $105.4 million
         ($1.26 per share). The nine months 2000 net income was $58.6 million
         ($.70 per share).

         The third quarter 2001 net loss includes a decrease of $2.8 million in
         corporate general and administrative expenses from third quarter 2000,
         while nine months 2001 includes a decrease of $4.5 million. Third
         quarter 2001 includes pension expense of $500 thousand as compared to
         pension income of $3.0 million for third quarter 2000. Nine months 2001
         pension income was $5.1 million, while nine months 2000 pension income
         was $10.7 million. The significant reduction in noncash pension income
         from 2000 levels is the result of a lower surplus in the new pension
         plan than that in the terminated plan.

         The nonrecurring items for the third quarter and nine months periods,
         which have been discussed above, are summarized in the following table.

                                       21
<PAGE>

        A summary of (loss) income and related per share information, follows:

<TABLE>
<CAPTION>
                                                                 (in millions except for per share amounts)
                                                                   Third Quarter            Nine Months
                                                                   -------------            -----------
                                                                  2001        2000        2001        2000
                                                                  ----        ----        ----        ----
<S>                                                             <C>          <C>        <C>          <C>
         Net income (loss):
            Earnings excluding nonrecurring items               $(2.3)       $  4.3     $   6.3      $ 10.5
            Nonrecurring items (a)                                3.0          17.3      (111.7)       48.1
                                                                -----        ------     -------      ------
                Net income (loss)                               $ 0.7        $ 21.6     $(105.4)     $ 58.6
                                                                =====        ======     =======      ======

         Basic and diluted earnings (loss) per share:
            Earnings excluding nonrecurring items               $(.02)       $  .05     $   .08      $  .12
            Nonrecurring items (a)                                .03           .21       (1.34)        .58
                                                                -----        ------     -------      ------
                Net income (loss)                               $ .01        $  .26     $ (1.26)     $  .70
                                                                =====        ======     =======      ======

         (a)Nonrecurring items after income taxes:
            Engine oil additives rationalization costs:
                 Write-off of assets                            $   -        $    -     $ (25.8)     $    -
                 Severance, early retirement, and other costs    (0.3)            -       (21.0)          -
                 Gain on sale of assets                           3.3             -         3.3           -
              Pension settlement income (expense)
                 including 2001 excise tax provision                -          18.2       (68.8)       49.8
              Gain on sale of nonoperating asset                    -             -         0.6         1.4
              Income from demutualization of MetLife, Inc.          -             -           -         2.6
              Manufacturing facility write-off                      -             -           -        (4.8)
              Special retirement charge                             -          (0.9)          -        (0.9)
                                                                -----        ------     -------      ------
                                                                $ 3.0        $ 17.3     $(111.7)     $ 48.1
                                                                =====        ======     =======      ======
</TABLE>

        Cash Flows, Financial Condition, and Liquidity
        ----------------------------------------------
        Cash and cash equivalents at September 30, 2001 were $17.2 million
        compared to $4.5 million at December 31, 2000. Our cash flows were more
        than sufficient to cover operating activities during the 2001 period.
        Cash flows from operating activities for nine months 2001 were $149.3
        million, including $130.8 million from the pension reversion. We used
        the $149.3 million, as well as $10.9 million from the sale of certain
        assets, to make a net repayment on bank debt of $130.7 million, to fund
        capital expenditures of $6.6 million, to invest $1.3 million in Envera,
        to pay $10.1 million in debt issuance costs, and to increase cash and
        cash equivalents on hand by $12.8 million. Ethyl expects that cash from
        operations will continue to be sufficient to cover our operating
        expenses.

        Depreciation and amortization in the Condensed Consolidated Statements
        of Cash Flows includes accelerated depreciation of $41.2 million due to
        the shortened lives of certain engine oil additives assets.

        At September 30, 2001, we had restricted cash of $1.1 million, which was
        a portion of the funds we received from the demutualization of MetLife,
        Inc. in 2000. Ethyl is using this cash to offset the employee portion of
        retiree health benefit costs.

                                       22
<PAGE>

         Ethyl has combined current and noncurrent long-term debt of $312.2
         million at September 30, 2001, as compared to $443.2 million at
         December 31, 2000. Through nine months of this year, we paid down a
         total of $131.0 million of debt including $91.4 million on the term
         loan and $24.3 million on the new term loan. We also made net
         repayments of $15.0 million on the revolving credit agreement, and our
         capital leases also decreased $300 thousand.

         Part of the $131.0 million debt reduction through nine months 2001 is
         temporary as the income taxes related to the pension reversion are due
         near the end of the year. Taking the December tax payment into
         consideration, we anticipate that the utilization of cash on hand, cash
         flows from operations, and other planned strategies will result in debt
         reduction for the year in the range of $120 million.

         As a percentage of total capitalization, Ethyl's total debt increased
         from 63.1% at the end of 2000 to 68.1% at September 30, 2001. This
         increase reflects the result of the special charges associated with the
         engine oil additives rationalization, as well as the one-time charges
         related to the pension termination, which substantially reduced equity
         resulting in lower debt outstanding still representing a higher
         percentage of capitalization than at December 31, 2000.

         The current maturity date of our bank loans is August 28, 2002. We are
         discussing an extension of the maturity date of these loans with our
         lenders. While it is our intent and expectation to extend these loans,
         the amounts outstanding are classified as current on our financial
         statements in accordance with generally accepted accounting principles.
         We believe we will complete an agreement on these bank loans by the end
         of this year. However, there is no assurance that an agreement will be
         accomplished. This would cause us to pursue other alternatives. While
         we believe alternatives, if required, would be available to us and
         achievable, there can be no assurance of their success.

         We expect our capital spending during 2001 will be about $10 million,
         somewhat lower than 2000. Ethyl will continue to finance capital
         spending through cash provided from operations.

         At September 30, 2001, we had negative working capital of $164.9
         million, resulting in a current ratio of 0.63 to 1. At December 31,
         2000, the working capital was $93.9 million and the current ratio was
         1.46 to 1.

         The negative working capital is the result of the reclassification of
         our long-term debt to current liabilities, as discussed above. Also
         contributing to the negative working capital were decreases in
         inventories and accounts receivable, as well as an increase in taxes
         payable. Partially offsetting these were increases in cash and cash
         equivalents and decreases in accrued expenses and accounts payable.

         Pension Plan
         ------------
         At December 31, 2000, we terminated an overfunded U.S. salaried
         employee pension plan. Ethyl received regulatory approval for the plan
         termination in second quarter 2001. The proceeds from the terminated
         plan amount to $178.9 million. After fully funding a new pension plan
         for U.S. salaried employees which has comparable provisions and benefit
         formula, we received $130.8 million in third quarter 2001 which
         represent the

                                       23
<PAGE>

         reversion of pension assets. The reversion amount was subject to the
         usual corporate income taxes, as well as a 20% federal excise tax.
         Total federal income, state income, and excise taxes amounted to $76.8
         million. The excise tax of $26.2 million was paid in the third quarter
         2001. The federal tax is payable in December of this year and will be
         funded to a large degree through our loan agreements. The net cash
         received, after the payment of excise taxes, amounted to just over $104
         million and was used to pay down our debt in the third quarter. In
         addition, the funds available prior to the tax payments are being used
         for the temporary reduction of debt. In 2001 and future years, Ethyl
         will report reduced noncash pension income, since the amount of surplus
         in the new pension plan will be less than that in the terminated plan.

         New Credit Facility
         -------------------
         On April 10, 2001, we entered the First Amended and Restated Credit
         Agreement (the New Credit Facility) with our lenders. This was a result
         of our anticipating not being in compliance with one of the covenants
         of the previous agreement at the end of the first quarter 2001.

         The New Credit Facility includes a revolving line of credit of $170
         million (including a letter of credit sub-facility), the remaining
         portion of the original term loan, and a new term loan of $230 million.
         Since we did not enter into an asset-based secured financing facility
         before May 31, 2001 which would have been utilized to reduce the term
         loan and revolving debt by $115 million, we paid an additional fee of
         $675 thousand. The New Credit Facility will mature on August 28, 2002.

         The key provisions of the New Credit Facility are detailed in Note 23
         of our Form 10-K for the year ended December 31, 2000. These provisions
         include collateralizing substantially all of our assets in the United
         States and higher interest rates. Mandatory prepayments on debt are
         required from excess cash flow, asset dispositions, distributions from
         our pension plan, and certain other transactions. The payment of
         dividends is not permitted and investments, as well as capital
         expenditures are limited.



         Business Model
         --------------
         Our two business segments, TEL and petroleum additives, both reported
         declines in earnings in each of the last two full years. The rate of
         decline in TEL operating profit in 2000 was 19% compared to 1999 and
         23% compared to 1998. We expect continued average annual declines in
         the TEL market of approximately 15%.

         Operating profit of the petroleum additives business declined 71% in
         2000 compared to 1999 and 74% compared to 1998. Nine months 2001
         profits were also down from nine months 2000. The petroleum additives
         market for some time has continued to reflect excess capacity,
         substantial raw material and energy cost increases, unfavorable
         currency conditions, and the pricing leverage of the consolidating oil
         industry. The market for engine oil additives products was not earning
         an adequate return. We attempted to recover some of the lost margin
         through price increases. However, these initiatives were not successful
         in keeping up with cost increases and were factors in the loss of
         business with three major customers that represented a significant
         portion of our engine oil

                                       24
<PAGE>

         additives business. A substantial portion of the engine oil additives
         business with these three former customers was completed by the end of
         the first quarter 2001.

         In an effort to improve profitability, we announced in February 2001
         and have implemented a new business model for petroleum additives. We
         will continue offering chemical technology solutions and systems for
         fuels, refinery operations, driveline and industrial lubricants, engine
         oils and other formulations, applying our resources in a way that is
         consistent with our new strategy. The model also includes the idling of
         production and research facilities, as well as a workforce reduction.
         Our cost reduction and restructuring efforts are now essentially
         complete. We expect that these actions will reduce operating expenses
         by approximately $60 million on an annualized basis.

         The engine oil additives production facilities that were indefinitely
         idled during the second quarter 2001 included a small plant in Natchez,
         Mississippi and portions of the plants in Houston, Texas and Rio de
         Janeiro, Brazil. We are consolidating production in plants that have
         spare capacity. These actions will reduce our operations for engine oil
         additives production to approximately 50% of our capacity. We have also
         consolidated certain research and testing activities from our
         Bracknell, England facility to our modern facilities located in
         Richmond, Virginia, and have reduced research on products where the
         market does not provide an adequate return on investment.

         In first quarter 2001, we evaluated all engine oil additives assets,
         including the related intangible assets, for impairment in accordance
         with Statement of Financial Accounting Standard No. 121, "Accounting
         for Long-Lived Assets and for Long Lived Assets to be Disposed Of." We
         considered if the indefinitely idled assets were impaired and concluded
         that these assets should be depreciated over the remaining useful lives
         through the anticipated closure dates in the second quarter 2001. The
         intangible assets had a book value of approximately $76 million at
         March 31, 2001. We determined that a writedown of the intangible assets
         was not appropriate.

         As part of the workforce reduction, we announced an involuntary
         severance program that resulted in a reduction of 319 positions.
         Included were staff at the engine oil additives plants being
         indefinitely idled, staff at our Bracknell and Richmond research
         facilities, and corporate staff. We also announced a voluntary early
         retirement program for most domestic salaried employees over age 52.
         The involuntary severance program included 98 employees who were
         eligible for early retirement. Thirty-two additional employees, whose
         positions were not eliminated, voluntarily retired. Of the 351
         employees who were involuntarily severed or voluntarily retired, 138
         positions were in manufacturing, 115 were in research and testing, and
         98 were administrative positions. Most of the nonmanufacturing
         terminations were effective April 30, 2001; however, some occurred
         later in the second and third quarters. For the nine months 2001, we
         paid $8.8 million for costs related to the employees who were
         terminated by September 30, 2001 as well as other shutdown costs. We
         paid $3.0 million during the third quarter 2001.

         We charged $500 thousand for costs related to our cost reduction
         initiative program during the third quarter 2001. Of this, severance,
         early retirement, and other expenses amounted to $400 thousand. Noncash
         charges for a portion of the accelerated depreciation and related
         expenses amounted to $100 thousand. For the third quarter 2001,

                                       25
<PAGE>

         we reported $400 thousand of severance, early retirement, and other
         expenses as a special item. Selling, general, and administrative
         included $100 thousand.

         During nine months 2001, we reported charges of $74.0 million for the
         engine oil additives rationalization program. Severance, early
         retirement, and other expenses amounted to $29.1 million. Accelerated
         depreciation and related costs were $42.5 million and shutdown costs
         were $2.4 million. Of these costs, we reported $29.1 million of
         severance, early retirement, and other expenses as a special item. Cost
         of goods sold included $41.8 million; selling, general, and
         administrative included $100 thousand; and research, development, and
         testing expenses included $3.0 million.

         We believe that we have the ability to successfully implement our new
         business model for petroleum additives, which will improve our ability
         to comply with the terms of the New Credit Facility. While we believe
         our plan is sound and attainable, the possibility exists that
         unforeseen events or business conditions may adversely affect our
         ability to meet certain financial covenants of the New Credit Facility.

         If unforeseen events or conditions restrict us from meeting our
         targeted results, we have alternative plans that we believe would
         improve our ability to comply with the debt covenants. These plans
         include additional asset sales, additional reductions in operating
         costs, deferral of capital expenditures, and reductions in working
         capital. In the event that we are not in compliance with the debt
         covenants at some future date, we would pursue various alternatives.
         These may include, among other things, refinancing of debt or obtaining
         covenant amendments or waivers. While we believe we could successfully
         complete alternative arrangements if necessary, there can be no
         assurance that such alternatives would be available or that we would be
         successful in their implementation.


         Recently Issued Accounting Standards
         ------------------------------------
         The Financial Accounting Standards Board issued four new Statements of
         Financial Accounting Standards (SFAS.)

         SFAS 141 "Business Combinations", issued in July 2001, requires that
         the purchase method of accounting be used for all business combinations
         initiated after June 30, 2001. The pooling-of-interests method of
         accounting is no longer allowed. We do not expect this statement to
         have a significant impact on Ethyl's financial statements.

         SFAS 142 "Goodwill and Other Intangible Assets", issued in July 2001,
         is effective for fiscal years beginning after December 15, 2001. The
         statement eliminates the amortization of goodwill as of January 1,
         2002. In addition, the statement no longer requires that intangibles be
         amortized if the life of the intangible is determined to be indefinite.
         Further, goodwill and intangibles will be reviewed at least annually
         for possible impairment. While we will discontinue goodwill
         amortization on December 31, 2001, we are currently evaluating the full
         impact of this statement.

         SFAS 143 "Accounting for Asset Retirement Obligations" was issued in
         August 2001. This statement addresses the obligations and asset
         retirement costs associated with the retirement of tangible long-lived
         assets. It requires that the fair value of the liability for an asset
         retirement obligation be recorded when incurred instead of over the
         life of the

                                       26
<PAGE>

         asset. The asset retirement costs must be capitalized as part of the
         carrying value of the long-lived asset. If the liability is settled for
         an amount other than the recorded balance, either a gain or loss will
         be recognized at settlement. This statement is effective for fiscal
         years beginning after June 15, 2002. We have not completed the
         necessary analysis, and therefore cannot yet assess the potential
         impact on our financial statements.

         SFAS 144 "Accounting for the Impairment or Disposal of Long-Lived
         Assets" was issued in October 2001 and is effective for fiscal years
         beginning after December 15, 2001. While this statement supercedes SFAS
         121 "Accounting for the Impairment of Long-Lived Assets and for
         Long-Lived Assets to Be Disposed Of", SFAS 144 retains the framework
         established in SFAS 121 and addresses implementation issues. SFAS 144
         also supercedes Accounting Principles Board Opinion Number 30
         "Reporting Results of Operations-Reporting the Effects of Disposal of a
         Segment of a Business" and addresses the accounting for disposal of
         long-lived assets of a discontinued operation. Generally, SFAS 144
         requires that impaired assets or assets to be disposed of, whether
         reported in continuing operations or discontinued operations, be
         recorded at the lower of carrying amount or fair value less cost to
         sell. We are currently evaluating the impact of this statement.


         Other Matters
         -------------
         On May 30, 2001, Bruce C. Gottwald announced his retirement as Chief
         Executive Officer, effective June 1, 2001. He will continue as a
         director and Chairman of the Board of Directors.

         The Board of Directors elected Thomas E. (Teddy) Gottwald to the role
         of Chief Executive Officer, effective June 1, 2001. Teddy Gottwald
         joined Ethyl Corporation in 1984 in the Plastics Division. He was
         elected a Vice President of Ethyl and named divisional president of our
         Petroleum Additives Division in 1991. Mr. Gottwald was elected
         President and Chief Operating Officer of Ethyl Corporation in 1994. He
         also serves as a director and member of the Executive Committee.

                                       27
<PAGE>

         ITEM 3.  Quantitative and Qualitative Disclosures About Market Risk
                  ----------------------------------------------------------

         Except for the interest rate risk and marketable security price risk,
         there have been no significant changes in our market risk from the
         information provided in our Form 10-K for the year ended December 31,
         2000.

         On April 10, 2001 when we entered into the new credit facility, the
         premium charged on market interest rates under the new facility
         increased. As a result, a hypothetical 10% increase in interest rates
         may result in a significant difference on our earnings and cash flows
         from the effect that was reported in our Form 10-K for the year-end
         December 31, 2000. Currently, as market rates have decreased since
         December 31, 2000, the change in our interest rate risk has not
         resulted in a significant change in our interest and financing
         expenses.

         At September 30, 2001, we recorded our marketable securities at a fair
         value of $13.5 million including net unrealized losses of $4.4 million.
         The estimated loss in the fair value of marketable securities resulting
         from a hypothetical 10% decrease in price is $1.3 million.

                                       28
<PAGE>

                          PART II - Other Information


         ITEM 6.    Exhibits and Reports on Form 8-K
                    --------------------------------

                    (a)  Exhibits - None

                    (b)  No reports on Form 8-K have been filed during the
                         quarter for which this report is filed.

                                       29
<PAGE>

                                   SIGNATURE

          Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned there- unto duly authorized.


                                             ETHYL CORPORATION
                                             -----------------
                                               (Registrant)



Date: November 6, 2001                       By: /s/ D. A. Fiorenza
                                             ----------------------
                                             David A. Fiorenza
                                             Vice President and Treasurer
                                             (Principal Financial Officer)


Date: November 6, 2001                       By: /s/ Wayne C. Drinkwater
                                             ---------------------------
                                             Wayne C. Drinkwater
                                             Controller
                                             (Principal Accounting Officer)

                                       30