##### Table of Contents





UNITED
    STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C.
    20549
  FORM 10-K
  x

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934   For the fiscal year ended December 31, 2007

Commission file number 001-12515   OR
  o

TRANSITION REPORT
    PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
    OF 1934   OM GROUP,
    INC.
 (Exact name of Registrant as
    specified in its charter)
  Delaware

52-1736882(State or other jurisdiction of

(I.R.S. Employerincorporation or organization)

Identification No.)127 Public Square,
    1500 Key Tower,
    Cleveland, Ohio

44114-1221(Address of principal executive
    offices)

(Zip Code)   216-781-0083 Registrants
    telephone number, including area code
  Securities
    registered pursuant to Section 12(b) of the Act:
  Title of each class

Name of each exchange on which registeredCommon Stock, par value $0.01 per share

New York Stock Exchange   Securities registered pursuant to Section 12(g) of the
    Act:
   o x
  o x
  x o
  Regulation S-K Form 10-K Form 10-K. x
    Large accelerated
    filer x

Accelerated filer
    o

Non-accelerated
    filer o

Smaller reporting
    Company o(Do
    not check if a smaller reporting company)   Rule 12b-2 o x
      DOCUMENTS
    INCORPORATED BY REFERENCE




---



##### 





OM Group, Inc.
  TABLE OF
    CONTENTS
   
 PART IItem 1.

Business


2Item 1A.

Risk Factors


8Item 1B.

Unresolved Staff Comments


14Item 2.

Properties


14Item 3.

Legal Proceedings


15Item 4.

Submission of Matters to a Vote of Security
    Holders


15PART IIItem 5.

Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


16Item 6.

Selected Financial Data


17Item 7.

Managements Discussion and Analysis of
    Financial Condition and Results of Operations


18Item 7A.

Quantitative and Qualitative Disclosures about
    Market Risk


34Item 8.

Financial Statements and Supplementary Data


36Item 9.

Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


80Item 9A.

Controls and Procedures


80Item 9B.

Other Information


81PART IIIItem 10.

Directors and Executive Officers of the
    Registrant and Corporate Governance


82Item 11.

Executive Compensation


82Item 12.

Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


82Item 13.

Certain Relationships and Related Transactions,
    Director Independence


83Item 14.

Principal Accountant Fees and Services


83PART IVItem 15.

Exhibits and Financial Statement Schedules


84Signatures


89EX-3.2EX-10.4EX-10.5EX-10.8EX-12EX-21EX-23EX-24EX-31.1EX-31.2EX-32   1




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##### Table of Contents



PART I  Item 1.
    Business General
     
    On March 1, 2007, the Company completed the sale of its
    Nickel business
    On October 1, 2007, the Company completed the acquisition
    of Borchers GmbH (Borchers)
    On December 31, 2007, the Company completed the acquisition
    of the Electronics businesses (REM) of Rockwood
    Specialties Group, Inc.    Form 10-K
     2




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##### Table of Contents



non-U.S. operating
    2007
    Events
 REM Acquisition:
  Borchers Acquisition:
  Sale of the Nickel business:
  Redemption of Senior Subordinated
    Notes:
  Products
 Specialties
    Business
   3




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##### Table of Contents



and/or
      Product LineApplications

Grouping

Metals Used

Product AttributesRechargeable Batteries

Inorganics

Cobalt, Nickel

Improves the electrical conduction of rechargeable batteries
    used in cellular phones, video cameras, portable computers,
    power tools and hybrid electric vehiclesCoatings and paints

Advanced Organics

Cobalt, Manganese,
    Calcium, Zirconium,
    Aluminum

Promotes faster drying and other performance characteristics in
    such products as house paints (exterior and interior) and
    industrial and marine coatingsPrinting Inks

Advanced Organics

Cobalt, Manganese

Promotes faster drying in various printing inksTires

Advanced Organics

Cobalt

Promotes bonding of metal-to-rubber in radial tiresConstruction Equipment and Cutting Tools

Inorganics

Cobalt

Strengthens and adds durability to diamond and machine cutting
    tools and drilling equipment used in construction, oil and gas
    drilling, and quarryingPetrochemical Refining

Advanced Organics

Cobalt, Nickel

Catalyzes reduction of sulfur dioxide and nitrogen emissionsCeramics and Glassware

Inorganics

Cobalt, Nickel

Provides color for pigments, earthenware and glass and
    facilitates adhesion of porcelain to metalPolyester Resins

Advanced Organics

Cobalt, Copper, Zinc

Accelerates the curing of polyester resins found in reinforced
    fiberglass boats, storage tanks, bathrooms, sports equipment,
    automobile and truck componentsMemory Disks

Electronic Chemicals

Nickel

Enhances information storage on disks for computers and consumer
    electronics    4




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##### Table of Contents



REM
    Businesses
    Printed Circuit Boards: Co-Bra
    Bond® Shadow®
  Ultra-Pure Chemicals:
  Photomasks:
    2008 Business Segments:
      Competition
  5




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##### Table of Contents



Customers
     Raw
    Materials
      6




---



##### Table of Contents



Research
    and Development
       Patents
    and Trademarks
   Environmental
    Matters
 and/or
 7




---



##### Table of Contents



Employees
   SEC
    Reports
 Forms 10-K, 10-Q 8-K
  Item 1A.
    Risk
    Factors  8




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##### Table of Contents



EXTENDED
    BUSINESS INTERRUPTION AT OUR FACILITIES COULD HAVE AN ADVERSE
    IMPACT ON OPERATING RESULTS.
 and/or
  WE ARE AT
    RISK FROM UNCERTAINTIES IN THE SUPPLY OF UNREFINED COBALT, WHICH
    IS OUR PRIMARY RAW MATERIAL.
     OUR
    SUBSTANTIAL INTERNATIONAL OPERATIONS SUBJECT US TO RISKS, WHICH
    MAY INCLUDE UNFAVORABLE SOCIAL, LEGAL, POLITICAL, REGULATORY AND
    ECONOMIC CONDITIONS IN OTHER COUNTRIES.
   
    potential supply disruptions as a result of political
    instability, civil unrest or labor difficulties in countries in
    which we have operations, especially the DRC and surrounding
    countries;
    agreements may be difficult to enforce and contracts and
    agreements may be subject to government renegotiation;
    receivables may be difficult to collect through a foreign
    countrys legal system;
    foreign customers may have longer payment cycles;
    foreign countries may impose additional withholding taxes or
    otherwise tax our foreign income, impose tariffs or adopt other
    restrictions on foreign trade or investment, including currency
    exchange controls;
    general economic conditions in the countries in which we operate
    could have an adverse effect on our earnings from operations in
    those countries;
    unexpected adverse changes in foreign laws or regulatory
    requirements may occur, including with respect to export duties
    and quotas; and
    compliance with a variety of foreign laws and regulations may be
    difficult.   9




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##### Table of Contents



WE ARE AT
    RISK FROM FLUCTUATIONS IN THE PRICE OF UNREFINED COBALT AND
    OTHER RAW MATERIALS.
     WE MAY
    EXPERIENCE DIFFICULTIES INTEGRATING REM AND BORCHERS.
         WE ARE
    UNDERGOING A STRATEGIC TRANSFORMATION.
  10




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##### Table of Contents



WE INTEND
    TO CONTINUE TO SEEK ADDITIONAL ACQUISITIONS, WHICH COULD DIVERT
    MANAGEMENTS ATTENTION, RESULT IN DIFFICULTIES INTEGRATING
    THE ACQUIRED OPERATIONS AND EXPOSE US TO UNANTICIPATED COSTS AND
    LIABILITIES.
     THE RAPID
    INCREASE IN COBALT PRICES MAY CAUSE OUR CUSTOMERS TO LOOK FOR
    ALTERNATIVES TO COBALT IN THEIR PRODUCTS.
   WE ARE
    EXPOSED TO FLUCTUATIONS IN FOREIGN EXCHANGE RATES, WHICH MAY
    ADVERSELY AFFECT OUR OPERATING RESULTS.
 non-U.S. operating
  WE ARE
    SUBJECT TO STRINGENT ENVIRONMENTAL REGULATION AND MAY INCUR
    UNANTICIPATED COSTS OR LIABILITIES ARISING OUT OF ENVIRONMENTAL
    MATTERS.
    11




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##### Table of Contents



CHANGES
    IN ENVIRONMENTAL, HEALTH AND SAFETY REGULATORY REQUIREMENTS
    COULD AFFECT SALES OF THE COMPANYS PRODUCTS.
 and/or
  IMPLEMENTATION
    OF AN ENTERPRISE RESOURCE PLANNING (ERP) PROJECT HAS
    THE POTENTIAL FOR BUSINESS INTERRUPTION AND ASSOCIATED ADVERSE
    IMPACT ON OPERATING RESULTS.
   WE MAY
    NOT BE ABLE TO RESPOND EFFECTIVELY TO TECHNOLOGICAL CHANGES IN
    OUR INDUSTRY OR IN OUR CUSTOMERS PRODUCTS.
   BECAUSE
    WE DEPEND ON SEVERAL LARGE CUSTOMERS FOR A SIGNIFICANT PORTION
    OF OUR REVENUES, OUR OPERATING RESULTS COULD BE ADVERSELY
    AFFECTED BY ANY DISRUPTION OF OUR RELATIONSHIP WITH THESE
    CUSTOMERS OR ANY MATERIAL ADVERSE CHANGE IN THEIR
    BUSINESSES.
   WE
    OPERATE IN VERY COMPETITIVE INDUSTRIES.
  12




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##### Table of Contents



INDUSTRY
    CONSOLIDATION MAY LEAD TO INCREASED COMPETITION AND MAY HARM OUR
    OPERATING RESULTS.
   FAILURE
    TO RETAIN AND RECRUIT KEY PERSONNEL WOULD HARM OUR ABILITY TO
    MEET KEY OBJECTIVES.
   CHANGES
    IN EFFECTIVE TAX RATES OR ADVERSE OUTCOMES RESULTING FROM
    EXAMINATION OF OUR INCOME TAX RETURNS COULD ADVERSELY AFFECT OUR
    RESULTS.
   INADEQUATELY
    PROTECTING OUR INTELLECTUAL PROPERTY RIGHTS MAY ALLOW OTHER
    COMPANIES TO COMPETE DIRECTLY AGAINST US, OR WE MIGHT BE FORCED
    TO DISCONTINUE SELLING CERTAIN PRODUCTS.
     OUR STOCK
    PRICE MAY CONTINUE TO BE VOLATILE.
  13




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##### Table of Contents



Item 1B.
    Unresolved
    Staff Comments   Item 2.
    Properties       Facility

Segment

ApproximateLocation

Function*

(at December 31, 2007)

Square Feet


Leased/OwnedAfrica:Lubumbashi, DRC

M

Specialties


116,000


joint venture (55% owned)North America:Cleveland, Ohio

A

Corporate


24,500


LeasedWestlake, Ohio

A, R

Specialties


35,200


OwnedBelleville, Ontario

M

Specialties


38,000


OwnedFranklin, Pennsylvania

M

Specialties


331,500


OwnedNewark, New Jersey

Held for sale

Specialties


32,000


OwnedSouth Plainfield, NewJersey

A, R

Specialties


18,400


LeasedLos Gatos, California

M, A

(a)


24,912


LeasedFremont, California

M, A

(a)


16,000


LeasedMaple Plain, Minnesota

M, A, R

(a)


65,000


OwnedAsia-Pacific:Kuching, Malaysia

M, R

Specialties


55,000


LeasedTokyo, Japan

A

Specialties


2,300


LeasedTaipei, Taiwan

A

Specialties


2,350


LeasedChung-Li, Taiwan

M, A, R

(a)


37,000


LeasedSuzhou, China

M

Specialties


85,530


OwnedSuzhou, China

M, A

(a)


30,000


LeasedShenzen, China

A, W

(a)


25,000


LeasedSingapore

M, A, R

Specialties


5,375


LeasedSingapore

A, W

(a)


70,000


LeasedEurope:Manchester, England

M, A, R

Specialties


73,300


OwnedKokkola, Finland

M, A, R

Specialties


470,000


OwnedGlenrothes, England

M,, A

(a)


80,000


OwnedRiddings, England

M, A, R

(a)


30,000


LeasedSaint Cheron, France

W

(a)


42,030


OwnedSaint Fromond, France

M, A, R

(a)


99,207


OwnedRousset Cedex, France

A, W

(a)


14,400


LeasedCastres, France

M, A

Specialties


43,000


OwnedLagenfeld, Germany

A, R

Specialties


47,430


Leased  14




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##### Table of Contents




    
    * M  Manufacturing/refining; A 
    Administrative; R  Research and Development;
    W  Warehouse
    
    (a) Location acquired with the REM acquisition. As a result of
    the acquisition, beginning January 1, 2008, the Company
    reorganized its management structure and external reporting
    around two segments: Specialty Chemicals and Advanced Materials
    (as set forth in the products description section below).  Item 3.
    Legal
    Proceedings   Item 4.
    Submission
    of Matters to a Vote of Security Holders   Executive
    Officers of the Registrant
 Form 10-K.
      
    Chairman and Chief Executive Officer, August 2005
    Chief Executive Officer, June 2005
    President, Chief Operating Officer and Board Member, The
    Sherwin-Williams Company
    1999-2005    
    Chief Financial Officer, March 2006
    Interim Chief Financial Officer, November 2005  March
    2006
    Owner and President, G&H Group Company, dba Partners
    in Success, May 2000  March 2006    
    Vice President, General Counsel and Secretary, September 2005
    Executive Vice President, General Counsel and Secretary, Jo-Ann
    Stores, Inc.,
    2003-2005
    General Counsel, Marconi plc,
    2002-2003.
    Executive Vice President and General Counsel, Marconi
    Communications, Inc., the operating company for Marconi, plc in
    the Americas, April 2001 to March 2002, and Vice President and
    General Counsel, November 2000 to April 2001.    
    Vice President and General Manager, Specialties Group, January
    2006
    Vice President and General Manager, Cobalt Group, August
    2003  January 2006
    Corporate Vice President of Technology, 2000  August
    2003    
    Vice President, Strategic Planning and Business Development,
    February 2007
    Vice President, Corporate Affairs and Investor Relations,
    October 2005  February 2007
    Director of Investor Relations, July 2002  October
    2005
    Director, Corporate Communications, Great Lakes Chemical
    Corporation
    1999-2002 15




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##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities     2007


2006Sales Price


Cash


Sales Price


CashHigh


Low


Dividend


High


Low


DividendFirst quarter

$
53.83


$
39.36


$



$
23.85


$
17.12


$
Second quarter

$
63.73


$
43.35


$



$
34.32


$
23.14


$
Third quarter

$
56.03


$
36.22


$



$
44.70


$
30.13


$
Fourth quarter

$
61.42


$
43.90


$



$
59.75


$
43.28


$
  16




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##### Table of Contents



Item 6.
    Selected
    Financial Data Year Ended December 31,2007


2006


2005


2004


2003(In millions, except per share data)Income Statement Data:Net sales

$
1,021.5


$
660.1


$
617.5


$
689.5


$
417.4Cost of products sold


708.3



475.4



516.5



468.9



304.4Gross profit


313.2



184.7



101.0



220.6



113.0Selling, general and administrative expenses


117.0



109.4



75.9



116.2



185.6Income (loss) from operations

$
196.2


$
75.3


$
25.1


$
104.4


$
(72.6
)Income (loss) from continuing operations before cumulative
    effect of change in accounting principle

$
111.5


$
23.6


$
(12.4
)

$
40.1


$
(102.6
)Income of discontinued operations, net of tax


63.1



192.2



49.0



88.5



186.3Gain on sale of discontinued operations, net of tax


72.3















Cumulative effect of a change in accounting principle






0.3



2.3







Net income

$
246.9


$
216.1


$
38.9


$
128.6


$
83.7Net income (loss) per common share  basic:Continuing operations

$
3.73


$
0.80


$
(0.43
)

$
1.41


$
(3.62
)Discontinued operations


4.52



6.55



1.71



3.11



6.57Cumulative effect of change in accounting principle






0.01



0.08







Net income

$
8.25


$
7.36


$
1.36


$
4.52


$
2.95Net income (loss) per common share  assuming
    dilution:Continuing operations

$
3.68


$
0.80


$
(0.43
)

$
1.40


$
(3.62
)Discontinued operations


4.47



6.50



1.71



3.09



6.57Cumulative effect of a change in accounting principle






0.01



0.08







Net income

$
8.15


$
7.31


$
1.36


$
4.49


$
2.95Dividends declared and paid per common share

$



$



$



$



$
Ratio of earnings to fixed charges(a)


n/a



2.5
x






2.5
x


Balance Sheet Data:Total assets

$
1,469.2


$
1,618.2


$
1,220.3


$
1,334.7


$
1,211.4Long-term debt, excluding current portion(b)

$
1.1


$
1.2


$
416.1


$
24.7


$
430.5     (a)
    
    The ratio of earnings to fixed charges is not applicable for
    2007 as a result of the redemption of the Notes on March 7,
    2007. The ratio of earnings to fixed charges has been
    recalculated for all periods presented to reflect the Nickel
    business as discontinued operations. Earnings were inadequate to
    cover fixed charges by $16.6 million and $96.1 million in
    2005 and 2003, respectively.(b)
    
    Amount in 2006 excludes the $400.0 million of outstanding
    Notes. On February 2, 2007, the Company notified its
    noteholders that it had called for redemption all
    $400.0 million of its outstanding Notes and, accordingly,
    the Notes were classified as a current liability at
    December 31, 2006. The Notes were redeemed on March 7,
    2007. Amount in 2004 excludes the $400.0 million of Notes,
    which were then in default and classified as a current liability. 17




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations   Overview
     
    On March 1, 2007, the Company completed the sale of its
    Nickel business
    On October 1, 2007, the Company completed the acquisition
    of Borchers
    On December 31, 2007, the Company completed the acquisition
    of the REM businesses of Rockwood Specialties Group, Inc.   18




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##### Table of Contents



non-U.S. operating
  2007
    Events
 REM Acquisition:
  Borchers Acquisition:
 19




---



##### Table of Contents



Sale of the Nickel business:
  Redemption of Senior Subordinated
    Notes:
  Overall
    operating results for 2007, 2006 and 2005
   (Millions of dollars & percent of net sales)

2007





2006





2005Net sales

$
1,021.5






$
660.1






$
617.5Cost of products sold


708.3







475.4







516.5Gross profit


313.2



30.7%



184.7



28.0%



101.0



16.4%Selling, general and administrative expenses


117.0



11.5%



109.4



16.6%



75.9



12.3%Operating profit


196.2



19.2%



75.3



11.4%



25.1



4.1%Other income (expense), net


2.0







(14.8
)






(42.9
)Income tax expense


(76.3
)






(30.6
)






(1.7
)Minority partners share of (income) loss


(10.4
)






(6.3
)






7.1Income (loss) from continuing operations before cumulative
    effect of change in accounting principle


111.5







23.6







(12.4
)Discontinued operations:Income from discontinued operations, net of tax


63.1







192.2







49.0Gain on sale of discontinued operations, net of tax


72.3















Total income from discontinued operations, net of tax


135.4







192.2







49.0Income before cumulative effect of change in accounting principle


246.9







215.8







36.6Cumulative effect of change in accounting principle










0.3







2.3Net income

$
246.9






$
216.1






$
38.9Net income (loss) per common share  basic:Continuing operations

$
3.73






$
0.80






$
(0.43
)Discontinued operations


4.52







6.55







1.71 20




---



##### Table of Contents



(Millions of dollars & percent of net sales)

2007





2006





2005Cumulative effect of change in accounting principle










0.01







0.08Net income

$
8.25






$
7.36






$
1.36Net income (loss) per common share  assuming
    dilution:Continuing operations

$
3.68






$
0.80






$
(0.43
)Discontinued operations


4.47







6.50







1.71Cumulative effect of change in accounting principle










0.01







0.08Net income

$
8.15






$
7.31






$
1.36Weighted average shares outstanding:Basic


29,937







29,362







28,679Assuming dilution


30,276







29,578







28,679   Form 10-K.
  2007
    operating results compared to 2006
   (thousands of dollars)

2007


%


2006


%Net SalesInorganics

$
717,605



70%


$
422,496



64%Advanced organics


194,620



19%



151,114



23%Electronic chemicals


109,276



11%



86,494



13%$
1,021,501






$
660,104     2007


2006VolumesInorganics sales volume  metric tons*


25,432



27,435Advanced organics sales volume  metric tons


30,272



27,524Electronic chemicals sales volume  gallons (thousands)


7,278



6,635Cobalt refining volume  metric tons


9,158



8,582     *
    
    Inorganics sales volume includes cobalt metal resale and copper
    by-product sales and excludes volume related to specialty nickel
    salts sales under the Norilsk distribution agreement, as
    explained below. 21




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##### Table of Contents



2007


2006Americas


21
%


22
%Asia


48
%


44
%Europe


31
%


34
%     2007


2006Batteries


31
%


25
%Chemical


15
%


16
%Electronic Chemical


11
%


13
%Tire


7
%


8
%Powder Metallurgy


9
%


9
%Coatings


6
%


7
%Other


21
%


22
%     2007


2006


ChangeFirst Quarter

$
25.82


$
12.43


$
13.39Second Quarter

$
28.01


$
14.43


$
13.58Third Quarter

$
25.84


$
15.59


$
10.25Fourth Quarter

$
32.68


$
18.66


$
14.02Full Year

$
27.99


$
15.22


$
12.77      22




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##### Table of Contents



Year Ended December 31,(In thousands)

2007


2006


ChangeInterest expense

$
(7,820
)

$
(38,659
)

$
30,839Loss on redemption of Notes


(21,733
)






(21,733
)Interest income


19,396



8,566



10,830Interest income on Notes receivable from joint venture partner


4,526







4,526Foreign exchange gain


8,100



3,661



4,439Gain on sale of investment






12,223



(12,223
)Other income (expense), net


(449
)


(582
)


133$
2,020


$
(14,791
)

$
16,811    23




---



##### Table of Contents



Form 10-K). Form 10-K).
          Form 10-K.
    2006
    operating results compared to 2005
   (thousands of dollars)

2006


%


2005


%Net SalesInorganics

$
422,496



64
%

$
400,921



65
%Advanced organics


151,114



23
%


157,195



25
%Electronic chemicals


86,494



13
%


59,411



10
%$
660,104






$
617,527  24




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##### Table of Contents



2006


2005Americas


22%



28%Asia


44%



41%Europe


34%



31%     2006


2005Batteries


25%



26%Chemical


16%



15%Electronic Chemical


13%



10%Tire


8%



9%Powder Metallurgy


9%



12%Coatings


7%



8%Other


22%



20%     2006


2005


ChangeFirst Quarter

$
12.43


$
17.26


$
(4.83
)Second Quarter

$
14.43


$
15.03


$
(0.60
)Third Quarter

$
15.59


$
13.41


$
2.18Fourth Quarter

$
18.66


$
12.51


$
6.15Full Year

$
15.22


$
14.55


$
0.67        25




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##### Table of Contents



Form 10-K)
            Form 10-K.
 26




---



##### Table of Contents



Liquidity
    and Capital Resources
 Cash Flow
    Summary
   2007


2006


changeNet cash provided by (used for):Operating activities

$
41.0


$
95.0


$
(54.0
)Investing activities


135.2



(18.0
)


153.2Financing activities


(406.7
)


(5.7
)


(401.0
)Effect of exchange rate changes on cash


1.4



4.6



(3.2
)Discontinued
    operations-net
    cash used for operating activities


48.5



107.4



(58.9
)Discontinued
    operations-net
    cash used for investing activities


(1.5
)


(15.6
)


14.1Net change in cash and cash equivalents

$
(182.1
)

$
167.7


$
(349.8
)      27




---



##### Table of Contents



2006


2005


changeNet cash provided by (used for):Operating activities

$
95.0


$
(7.4
)

$
102.4Investing activities


(18.0
)


(8.9
)


(9.1
)Financing activities


(5.7
)


(5.6
)


(0.1
)Effect of exchange rate changes on cash


4.6



(5.3
)


9.9Discontinued
    operations-net
    cash used for operating activities


107.4



123.8



(16.4
)Discontinued
    operations-net
    cash used for investing activities


(15.6
)


(8.8
)


(6.8
)Net change in cash and cash equivalents

$
167.7


$
87.8


$
79.9         Debt and
    Other Financing Activities
    28




---



##### Table of Contents



Capital
    Expenditures
     Contractual
    Obligations
   Payments due by period2008


2009


2010


2011


2012


Thereafter


TotalPurchase and other obligations(1)

$
657,954


$
506,987


$
506,899


$
505,530


$
103,402


$



$
2,280,772Debt obligations


513



138



138



138



138



584



1,649Operating lease obligations


4,472



4,123



3,831



1,636



1,609



8,317



23,988Total

$
662,939


$
511,248


$
510,868


$
507,304


$
105,149


$
8,901


$
2,306,409     (1)
    
    For 2008 through 2013, purchase
    obligations include raw material contractual obligations
    reflecting estimated future payments based on committed tons of
    material per the applicable contract multiplied by the reference
    price of each metal. The price used in the computation is the
    average daily price for the last week of December 2007 for each
    respective metal. Commitments made under these contracts
    represent future purchases in line with expected usage.   29




---



##### Table of Contents



Off
    Balance Sheet Arrangements
   Critical
    Accounting Policies
   Revenue Recognition
  Inventories first-in,
  Long-Lived Assets
  Income Taxes
 30




---



##### Table of Contents



Share-Based Compensation
    Recently
    Issued Accounting Standards
 Accounting
    Standards adopted in 2007:
 FIN No. 48:
  EITF
    No. 06-3: No. 06-03, No. 06-03 No. 06-03
  Accounting
    Standards Not Yet Adopted
 SFAS No. 160:
 31




---



##### Table of Contents



SFAS No. 159: instrument-by-instrument
  SFAS No. 157:
  SFAS No. 141R:
  EITF
    No. 06-4: No. 06-4,
 32




---



##### Table of Contents



No. 06-4 No. 06-4
  Effects
    of Foreign Currency
 non-U.S. operating
  Environmental
    Matters
 and/or
    Form 10-K
  Cautionary
    Statement for Safe Harbor Purposes Under the Private
    Securities Litigation Reform Act of 1995
 Form 10-K.
 33




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk Quantitative
    and Qualitative Disclosures About Market Risk
 and/or
             34




---



##### Table of Contents



non-U.S. operating
 35




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data   Report of
    Independent Registered Public Accounting Firm
          No. 04-6,
         36




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
                
    Management has identified a material weakness in internal
    controls related to the accounting for income taxes. 37




---



##### Table of Contents



38




---



##### Table of Contents



OM Group, Inc.
    and Subsidiaries
  Consolidated
    Balance Sheets
  December 31,2007


2006(In thousands, except share data)ASSETSCurrent assetsCash and cash equivalents

$
100,187


$
282,288Accounts receivable, less allowance of $1,541 in 2007 and $1,137
    in 2006


178,481



82,931Inventories


413,434



216,492Other current assets


60,655



30,648Interest receivable from joint venture partner


3,776



Assets of discontinued operations






597,682Total current assets


756,533



1,210,041Property, plant and equipment, net


288,834



210,953Goodwill


322,172



137,543Notes receivable from joint venture partner,less
    allowance of $5,200 in 2007 and 2006


24,179



24,179Other non-current assets


77,492



35,508Total assets

$
1,469,210


$
1,618,224LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesShort-term debt

$
347


$
326Current portion of long-term debt


166



167Debt to be redeemed






402,520Accounts payable


214,244



90,768Accrued income taxes


32,040



17,497Accrued employee costs


34,707



28,806Other current liabilities


25,435



42,057Liabilities of discontinued operations






167,148Total current liabilities


306,939



749,289Long-term debt


1,136



1,224Deferred income taxes


29,645



4,118Minority interests


52,314



43,286Other non-current liabilities


50,790



38,228Stockholders equity:Preferred stock, $.01 par value:Authorized 2,000,000 shares, no shares issued or outstanding






Common stock, $.01 par value:Authorized 60,000,000 shares; issued 30,122,209 in 2007 and
    29,801,334 shares in 2006


301



297Capital in excess of par value


554,933



533,818Retained earnings


467,726



221,310Treasury stock (61,541 shares in 2007 and 2006, at cost)


(2,239
)


(2,239
)Accumulated other comprehensive income


7,665



28,893Total stockholders equity


1,028,386



782,079Total liabilities and stockholders equity

$
1,469,210


$
1,618,224   See accompanying notes to consolidated financial
    statements.
 39




---



##### Table of Contents



OM Group, Inc.
    and Subsidiaries
  Statements of
    Consolidated Income
  Year Ended December 312007


2006


2005(In thousands, except per share data)Net sales

$
1,021,501


$
660,104


$
617,527Cost of products sold


708,257



475,437



516,566Gross profit


313,244



184,667



100,961Selling, general and administrative expenses


117,009



109,408



75,849Operating profit


196,235



75,259



25,112Other income (expense):Interest expense


(7,820
)


(38,659
)


(41,064
)Loss on redemption of Notes


(21,733
)






Interest income


19,396



8,566



1,904Interest income on Notes receivable from joint venture partner


4,526







Foreign exchange gain (loss)


8,100



3,661



(4,580
)Gain on sale of investment






12,223



Other income (expense), net


(449
)


(582
)


8602,020



(14,791
)


(42,880
)Income (loss) from continuing operations before income taxes,
    minority interest and cumulative effect of change in accounting
    principle


198,255



60,468



(17,768
)Income tax expense


(76,311
)


(30,554
)


(1,710
)Minority partners share of (income) loss


(10,405
)


(6,291
)


7,128Income (loss) from continuing operations before cumulative
    effect of change in accounting principle


111,539



23,623



(12,350
)Discontinued operations:Income from discontinued operations, net of tax


63,057



192,163



48,989Gain on sale of discontinued operations, net of tax


72,270







Total income from discontinued operations, net of tax


135,327



192,163



48,989Income before cumulative effect of change in accounting
    principle


246,866



215,786



36,639Cumulative effect of change in accounting principle






287



2,252Net income

$
246,866


$
216,073


$
38,891Net income (loss) per common share  basic:Continuing operations

$
3.73


$
0.80


$
(0.43
)Discontinued operations


4.52



6.55



1.71Cumulative effect of change in accounting principle






0.01



0.08Net income

$
8.25


$
7.36


$
1.36Net income (loss) per common share  assuming
    dilution:Continuing operations

$
3.68


$
0.80


$
(0.43
)Discontinued operations


4.47



6.50



1.71Cumulative effect of change in accounting principle






0.01



0.08Net income

$
8.15


$
7.31


$
1.36Weighted average shares outstanding:Basic


29,937



29,362



28,679Assuming dilution


30,276



29,578



28,679   See accompanying notes to consolidated financial
    statements.
 40




---



##### Table of Contents



OM Group, Inc.
    and Subsidiaries
  Statements of
    Consolidated Comprehensive  Income
  Year Ended December 312007


2006


2005(In thousands)Net income

$
246,866


$
216,073


$
38,891Foreign currency translation adjustments


(11,014
)


10,394



(6,365
)Reclassification of hedging activities into earnings, net of tax


(9,824
)


(954
)


(3,475
)Unrealized gain on cash flow hedges, net of tax expense of
    $3,117 in 2006 and $335 in 2005






9,824



954Realized gain on available-for-sale securities






(4,745
)


(930
)Unrealized gain on available-for-sale securities










4,745Additional pension and post-retirement obligation


(390
)


(199
)


(1,071
)Net change in accumulated other comprehensive income


(21,228
)


14,320



(6,142
)Comprehensive income

$
225,638


$
230,393


$
32,749   See accompanying notes to consolidated financial
    statements.
 41




---



##### Table of Contents



OM Group, Inc.
    and Subsidiaries
  Statements of
    Consolidated Cash Flows
 Year Ended December 31(In thousands)

2007


2006


2005Operating activitiesNet income

$
246,866


$
216,073


$
38,891Adjustments to reconcile net income to net cash provided by
    (used for) operating activities:Income from discontinued operations


(63,057
)


(192,163
)


(48,989
)Gain on sale of discontinued operations


(72,270
)






Income from cumulative effect of change in accounting principle






(287
)


(2,252
)Gain on sale of investment






(12,223
)


Loss on redemption of Notes


21,733







Depreciation and amortization


33,229



31,841



32,593Share-based compensation expense


7,364



5,227



3,509Excess tax benefit on exercise of stock options


(1,744
)






Foreign exchange (gain) loss


(8,100
)


(3,661
)


4,580Unrealized gain on cobalt forward purchase contracts


(6,735
)






Payment for termination of swap agreement






(2,877
)


Gain on collection of notes receivable










(2,500
)Provision for Note receivable from joint venture partner






1,000



4,200Interest income receivable from joint venture partner


(3,776
)






Deferred income taxes


(15,756
)


13,864



(3,300
)Minority partners share of income (loss)


10,405



6,291



(7,128
)Other non-cash items


431



(67
)


(3,736
)Changes in operating assets and liabilities, excluding the
    effect of business acquisitionsAccounts receivable


(38,364
)


(3,879
)


(2,440
)Inventories


(165,694
)


(27,613
)


67,418Accounts payable


92,161



39,310



(23,625
)Shareholder litigation accrual










(74,000
)Other, net


4,311



24,131



9,436Net cash provided by (used for) operating activities


41,004



94,967



(7,343
)Investing activitiesExpenditures for property, plant and equipment


(19,357
)


(14,547
)


(13,386
)Proceeds from the sale of assets


461







Net proceeds from the sale of the Nickel business


490,036







Proceeds from collection of notes receivable










2,500(Purchase) sale of investments


(2,000
)


12,223



Proceeds from loans to non-consolidated joint ventures


7,568







3,035Loans to non-consolidated joint ventures






(6,888
)


Acquisition of businesses, net of cash acquired


(336,976
)


(5,418
)


Expenditures for software


(4,483
)


(3,329
)


(1,007
)Net cash provided by (used for) investing activities


135,249



(17,959
)


(8,858
)Financing activitiesPayments of long-term debt and revolving line of credit


(400,000
)


(17,250
)


(55,622
)Proceeds from the revolving line of credit










49,872Premium for redemption of Notes


(18,500
)






Distribution to joint venture partners


(1,350
)






Proceeds from exercise of stock options


11,344



11,558



117Excess tax benefit on exercise of stock options


1,744







Net cash used for financing activities


(406,762
)


(5,692
)


(5,633
)Effect of exchange rate changes on cash


1,440



4,569



(5,293
)Cash and cash equivalentsIncrease (decrease) from continuing operations


(229,069
)


75,885



(27,127
)Discontinued operations  net cash provided by
    operating activities


48,508



107,379



123,769Discontinued operations  net cash used for investing
    activities


(1,540
)


(15,594
)


(8,803
)Balance at the beginning of the year


282,288



114,618



26,779Balance at the end of the year

$
100,187


$
282,288


$
114,618   See accompanying notes to consolidated financial
    statements
 42




---



##### Table of Contents



OM Group, Inc.
    and Subsidiaries
  Statements of
    Consolidated Stockholders Equity
  Year Ended December 31,(In thousands)

2007


2006


2005Common Stock  Shares Outstanding, net of Treasury
    SharesBeginning balance


29,740



29,307



28,480Shares issued under share-based compensation plans


321



433



40Shares issued for settlement of shareholder litigation










78730,061



29,740



29,307Common Stock  DollarsBeginning balance

$
297


$
293


$
285Shares issued under share-based compensation plans


4



4



Shares issued for settlement of shareholder litigation










8301



297



293Capital in Excess of Par ValueBeginning balance


533,818



516,510



498,250Shares issued under share-based compensation plans


11,340



11,555



845Excess tax benefit on the exercise of stock options


1,744







Settlement of shareholder litigation










13,375Share-based compensation  employees


7,929



5,753



4,040Share-based compensation  non-employee directors


102







554,933



533,818



516,510Retained EarningsBeginning balance


221,310



6,811



(32,080
)Adoption of FIN No. 48 in 2007 and EITF
    No. 04-6
    in 2006


(450
)


(1,574
)


Net income


246,866



216,073



38,891467,726



221,310



6,811Treasury StockBeginning balance


(2,239
)


(2,226
)


(710
)Reacquired shares






(13
)


(1,516
)(2,239
)


(2,239
)


(2,226
)Accumulated Other Comprehensive IncomeBeginning balance


28,893



15,145



21,287Foreign currency translation


(11,014
)


10,394



(6,365
)Reclassification of hedging activities into earnings, net of tax


(9,824
)


(954
)


(3,475
)Unrealized gain on cash flow hedges, net of tax expense of
    $3,541 in 2006 and $286 in 2005






9,824



954Reclassification of realized gain on available-for-sale
    securities into earnings






(4,745
)


(930
)Unrealized gain on available-for-sale securities










4,745Additional pension and post-retirement obligation


(390
)


(199
)


(1,071
)Adoption of SFAS No. 158






(572
)


7,665



28,893



15,145Total Stockholders Equity

$
1,028,386


$
782,079


$
536,533   See accompanying notes to consolidated financial
    statements
 43




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and Subsidiaries
  (In thousands, except as noted and per share amounts)
  Note 1 
    Significant
    Accounting Policies Principles of Consolidation 
        Use of Estimates 
  Cash Equivalents
  Revenue Recognition 
      Cost of Products Sold 
  Allowance for Doubtful Accounts 
 44




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
    Inventories  first-in,
  Receivables from Joint Venture Partners and Minority
    Interests 
          Property, Plant and Equipment 
    Internal Use Software 
 45




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
  No. 98-1,
  Long-lived Assets 
  Goodwill and Other Intangible Assets 
    Retained Liabilities of Businesses Sold 
  Research and Development 
  Repairs and Maintenance 
  Accounting for Leases 
  Income Taxes 
  Foreign Currency Translation 
 46




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
      Derivative Instruments 
      Note 2 
    Recently Issued
    Accounting Standards Accounting
    Standards adopted in 2007:
 FIN No. 48:
 47




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
  EITF
    No. 06-3: No. 06-03, No. 06-03 No. 06-03
  Accounting
    Standards Not Yet Adopted:
 SFAS No. 160:
  SFAS No. 159: instrument-by-instrument
  SFAS No. 158:
   48




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
    SFAS No. 157:
  SFAS No. 141R:
  EITF
    No. 06-4: No. 06-4, No. 06-4 No. 06-4
  Note 3 
    Inventories   2007


2006Raw materials and supplies

$
199,901


$
138,913Work-in-process


32,565



17,265Finished goods


180,968



60,314$
413,434


$
216,492  49




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
  Note 4 
    Property, Plant
    and Equipment, net   2007


2006Land and improvements

$
10,482


$
7,517Buildings and improvements


140,742



121,321Machinery and equipment


440,350



355,142Furniture and fixtures


12,907



14,283Property, plant and equipment, at cost


604,481



498,263Less accumulated depreciation


315,647



287,310$
288,834


$
210,953     Note 5 
    Investments     Note 6 
    Acquisitions  50




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
        Accounts receivable

$
46,090Inventory


23,121Other current assets


23,977Property, plant and equipment


79,733Other intangibles


38,000Other assets


2,443Goodwill


179,955Total assets acquired


393,319Accounts payable


24,384Other current liabilities


12,758Other liabilities


19,916Total liabilities assumed


57,058Net assets acquired

$
336,261Cash acquired


15,754Purchase price, net of cash acquired

$
320,507    51




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
    (Unaudited)


(Unaudited)Year Ended


Year EndedDecember 31,


December 31,2007


2006Net sales

$
1,223.9


$
847.1Income from continuing operations before cumulative effect of
    change in accounting principle

$
112.3


$
20.5Net income

$
247.6


$
213.0Net income per common share  basicContinuing operations

$
3.75


$
0.69Discontinued operations


4.52



6.55Cumulative effect of change in accounting principle






0.01Net income

$
8.27


$
7.25Net income per common share  assuming dilutionContinuing operations

$
3.71


$
0.69Discontinued operations


4.47



6.50Cumulative effect of change in accounting principle






0.01Net income

$
8.18


$
7.20      52




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
  Note 7 
    Discontinued
    Operations and Disposition of the Nickel Business     Initial proceeds

$
413.3Final purchase price adjustment


83.2Transaction costs


(6.5
)$
490.0          53




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
    2007


2006


2005Net sales

$
193,091


$
790,939


$
632,082Income from discontinued operations before income taxes

$
82,699


$
236,325


$
58,015Income tax expense


19,642



44,162



9,026Income from discontinued operations


63,057



192,163



48,989Gain on sale of discontinued operations


76,991







Income tax expense


(4,721
)






Total income from discontinued operations, net of tax

$
135,327


$
192,163


$
48,989     December 31,2006Accounts receivable

$
97,050Inventories


191,380Property, plant and equipment, net


149,857Goodwill


46,481Other current assets


112,914Assets of discontinued operations

$
597,682Accounts payable

$
100,644Other current liabilities


66,504Liabilities of discontinued operations

$
167,148   Note 8 
    Goodwill and
    Other Intangible Assets    54




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
    Balance at January 1, 2006

$
132,642Plaschem acquisition


1,295Foreign currency translation adjustments


3,606Balance at December 31, 2006


137,543Borchers acquisition


2,660REM acquisition


179,955Foreign currency translation adjustments


2,014Balance at December 31, 2007

$
322,172     Gross Carrying


AccumulatedAmount


Amortization


Net BalanceCustomer list

$
4,584


$
(3,896
)

$
688Capitalized software


8,944



(1,319
)


7,625Other intangibles


40,136



(1,995
)


38,141Balance at December 31, 2007

$
53,664


$
(7,210
)

$
46,454Customer list

$
4,584


$
(3,590
)

$
994Capitalized software


4,336







4,336Other intangibles


2,184



(1,915
)


269Balance at December 31, 2006

$
11,104


$
(5,505
)

$
5,599      55




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
  Note 9 
    Debt   2007


2006Senior Subordinated Notes

$



$
400,000Notes payable  bank


1,649



1,717Deferred gain on termination of fair value hedges






2,5201,649



404,237Less: Short-term debt


347



326Less: Current portion of long-term debt


166



167Less: Debt to be redeemed






402,520Total long-term debt

$
1,136


$
1,224            56




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
    2008

$
5132009


1382010


1382011


1382012


138thereafter


584$
1,649     Note 10 
    Financial
    Instruments        57




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
    Note 11 
    Income
    Taxes   Year Ended December 312007


2006


2005United States

$
(50,638
)

$
(72,018
)

$
(48,325
)Outside the United States


248,893



132,486



30,557$
198,255


$
60,468


$
(17,768
)     Year Ended December 312007


2006


2005Current tax provision (benefit):United States:Federal

$
51,195


$
422


$
365State and local


80



150



(105
)Outside the United States


40,792



16,118



4,750Total current


92,067



16,690



5,010Deferred tax provision (benefit):United States


(18,997
)


14,077



Outside the United States


3,241



(213
)


(3,300
)Total deferred


(15,756
)


13,864



(3,300
)$
76,311


$
30,554


$
1,710  58




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
    Year Ended December 312007


2006


2005Income (loss) from continuing operations before income taxes,
    minority interest and cumulative effect of change in accounting
    principle

$
198,255


$
60,468


$
(17,768
)Income taxes at the United States statutory rate (35)%

$
69,389


$
21,164


$
(6,219
)Effective tax rate differential on earnings/losses outside of
    the United States


(40,775
)


(23,966
)


(3,061
)Repatriation of foreign earnings


45,709



92,841



46,900Malaysian tax holiday


(6,975
)


(6,963
)


(4,899
)Change in deferred tax rates


1,930







Increase (reversal) of valuation allowance


4,103



(53,026
)


Income with no related tax expense










(30,769
)Other, net


2,930



504



(242
)Income tax expense

$
76,311


$
30,554


$
1,710Effective income tax rate


38.5
%


50.5
%


−9.6
%     December 312007


2006Current asset  operating accruals

$
7,131


$
7,892Current asset  federal operating loss and credit
    carryforwards






71,812Current liability  earnings repatriation






(95,840
)Current liability  prepaid expenses


(3,069
)


(2,503
)Non-current asset  employee benefit and other accruals


16,462



17,843Non-current asset  state operating loss carryforwards


7,827



10,697Non-current liability  accelerated depreciation


(24,850
)


(9,394
)Non-current liability  pensions


(4,793
)


(1,559
)Valuation allowance


(22,048
)


(18,762
)Net deferred tax liability

$
(23,340
)

$
(19,814
)  59




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
    December 312007


2006Other current assets

$
2,867


$
Other non-current assets


6,507



5,648Other current liabilities


(3,069
)


(21,344
)Deferred income taxes  non-current liabilities


(29,645
)


(4,118
)$
(23,340
)

$
(19,814
)              60




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
          Balance at January 1, 2007

$
2.1Additions for tax positions related to the current year


8.0Additions for tax positions of prior years


0.3Reductions for tax positions of prior years


(0.1
)Settlements


Balance at December 31, 2007

$
10.3       mark-ups
  Note 12 
    Pension and Other
    Post-Retirement Benefit Plans    61




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
    non-U.S. plans
    2007

2006U.S. PlansWeighted-average discount rate

5.50%


5.50
%Expected return on pension plan assets

7.00%


8.75
%Projected health care cost trend rate

9.00%


10.00
%Ultimate health care cost trend rate

5.00%


6.00
%Year ultimate health care trend rate is achieved

2012


2011Non U.S. PlansWeighted-average discount rate

5.0% - 5.25%


n/aExpected return on pension plan assets

5.0% - 6.0%


n/a       Target


December 31,Allocation


2007


2006Equity securities


50
%


54
%


47
%Debt securities


50
%


45
%


53
%Cash






1
%


Total assets


100
%


100
%


100
%    62




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
    Pension BenefitsU.S. Plans


Non-U.S. Plans2007


2006


2005


2007Service cost

$



$



$



$
4Interest cost


1,317



1,272



1,246



8Amortization of unrecognized net loss


302



269



214



Expected return on plan assets


(788
)


(922
)


(575
)


(2
)Amortization of unrecognized prior service cost










172



Amortization of unrecognized net transition (asset) obligation






9



(369
)


SERP expense related to former CEO






1,413



2,919



$
831


$
2,041


$
3,607


$
10   Other Post-retirement BenefitsU.S. Plans2007


2006


2005Service cost


82



131



69Interest cost


264



242



252Net amortization


40



40



40$
386


$
413


$
361  63




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
    Pension BenefitsU.S. Plans


Non-U.S. Plans2007


2006


2007Change in benefit obligationProjected benefit obligation at beginning of year

$
(24,902
)

$
(22,737
)

$
Service cost










(4
)Interest cost


(1,317
)


(1,272
)


(8
)Actuarial loss (gain)


171



(673
)


(9
)Benefits paid


904



997



14Acquisition










(1,866
)Foreign currency exchange rate changes










(64
)SERP payments (increase) related to former CEO


672



(1,217
)


Projected benefit obligation at end of year

$
(24,472
)

$
(24,902
)

$
(1,937
)Change in plan assetsFair value of plan assets at beginning of year

$
10,940


$
9,951


$
Actual return on plan assets


1,025



922



2Employer contributions


1,625



1,064



251Acquisition










81Foreign currency exchange rate changes










10Benefits paid


(904
)


(997
)


(14
)Fair value of plan assets at end of year

$
12,686


$
10,940


$
330Funded status  plan assets less than benefit
    obligations

$
(11,786
)

$
(13,962
)

$
(1,607
)Recognized in accumulated other comprehensive income:Net actuarial loss

$
8,744


$
9,453


$
9Amounts not yet recognized as a component of net
    postretirement benefit cost

$
8,744


$
9,453


$
9Amounts recorded in the balance sheet consist of:Accrued benefit liability

$
(11,786
)

$
(13,962
)

$
(1,607
)Accumulated other comprehensive loss


8,744



9,453



9Net amount recognized

$
(3,042
)

$
(4,509
)

$
(1,598
)   64




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
  Other Post-retirement BenefitsU.S. Plans2007


2006Change in benefit obligationProjected benefit obligation at beginning of year

$
(4,988
)

$
(4,514
)Service cost


(82
)


(131
)Interest cost


(264
)


(242
)Actuarial loss


(1,131
)


(391
)Benefits paid


385



290Projected benefit obligation at end of year

$
(6,080
)

$
(4,988
)Change in plan assetsFair value of plan assets at beginning of year

$



$
Employer contributions


385



290Benefits paid


(385
)


(290
)Fair value of plan assets at end of year

$



$
Funded status  plan assets less than benefit
    obligations

$
(6,080
)

$
(4,988
)Recognized in accumulated other comprehensive income:Net actuarial gain

$
1,431


$
301Prior service cost


231



271Amounts not yet recognized as a component of net
    postretirement benefit cost

$
1,662


$
572Amounts recorded in the balance sheet consist of:Accrued benefit liability

$
(6,080
)

$
(4,988
)Accumulated other comprehensive loss


1,662



572Net amount recognized

$
(4,418
)

$
(4,416
)   non-U.S. plans. non-U.S. defined
     65




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
    OtherPostretirementExpected Benefit Payments

Pension


Benefits2008

$
1,855


$
3832009

$
1,822


$
4132010

$
1,835


$
4132011

$
1,870


$
4202012

$
1,825


$
3932013-2017

$
9,295


$
1,939       OtherPostretirementPension


BenefitsNet actuarial loss

$
277


$
609Prior service cost






40Total

$
277


$
649     1% Increase


1% DecreaseBenefit cost

$
84


$
(66
)Projected benefit obligation

$
897


$
(734
)  66




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
  Note 13 
    Accumulated
    Other Comprehensive Income (Loss)  UnrealizedGains andLosses, Net


Unrealized





AccumulatedForeign


on Cash Flow


Gain on


Pension and


OtherCurrency


Hedging


Available for


Post-Retirement


ComprehensiveTranslation


Derivatives


Sale Securities


Obligation


Income (Loss)Balance January 31, 2005


25,065



3,475



930



(8,183
)


21,287Reclassification adjustments


(723
)


(3,475
)


(930
)






(5,128
)Current period credit (charge)


(5,642
)


1,289



4,745



(1,071
)


(679
)Deferred taxes






(335
)










(335
)Balance December 31, 2005


18,700



954



4,745



(9,254
)


15,145Reclassification adjustments






(954
)


(4,745
)






(5,699
)Current period credit (charge)


10,394



12,941







(199
)


23,136Deferred taxes






(3,117
)










(3,117
)Adoption of SFAS No. 158














(572
)


(572
)Balance December 31, 2006


29,094



9,824







(10,025
)


28,893Reclassification adjustments






(875
)










(875
)Current period credit (charge)


4,465



3,340







(390
)


7,415Disposal of Nickel business


(15,479
)


(12,289
)










(27,768
)Balance December 31, 2007

$
18,080


$



$



$
(10,415
)

$
7,665     Note 14 
    Earnings Per
    Share   2007


2006


2005Income (loss) from continuing operations before cumulative
    effect of change in accounting principle

$
111,539


$
23,623


$
(12,350
)Weighted average shares outstanding


29,937



29,362



28,679Dilutive effect of stock options and restricted stock


339



216



Weighted average shares outstanding  assuming dilution


30,276



29,578



28,679Income (loss) per common share from continuing operations before
    cumulative effect of change in accounting principle

$
3.73


$
0.80


$
(0.43
)Income (loss) per common share from continuing operations before
    cumulative effect of change in accounting principle 
    assuming dilution

$
3.68


$
0.80


$
(0.43
)  67




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
    2007


2006


2005Net income

$
246,866


$
216,073


$
38,891Weighted average shares outstanding


29,937



29,362



28,679Dilutive effect of stock options and restricted stock


339



216



Weighted average shares outstanding  assuming dilution


30,276



29,578



28,679Net income per common share

$
8.25


$
7.36


$
1.36Net income per common share  assuming dilution

$
8.15


$
7.31


$
1.36     Note 15 
    Share-Based
    Compensation 10-year
       68




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
            Stock
    Options
    69




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
      2007


2006


2005Risk-free interest rate


4.7
%


4.9
%


4.0
%Dividend yield










Volatility factor of Company common stock


0.47



0.47



0.44Weighted-average expected option life (years)


6.0



6.1



5.0Weighted-average grant-date fair value

$
26.24


$
14.97


$
9.61       Weighted-AverageFair Value atShares


Grant DateNon-vested at December 31, 2006


439,008


$
11.60Non-vested at December 31, 2007


364,343


$
18.46Granted during 2007


184,750


$
26.24Vested during 2007


254,665


$
12.18Vested during 2006


324,316


$
11.12Vested during 2005


216,666


$
11.99Forfeited during 2007


4,750


$
47.61    70




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
    WeightedWeighted


AverageAverage


Remaining


AggregateExercise


Contractual


IntrinsicShares


Price


Term


ValueOutstanding at January 1, 2007


894,703


$
32.40Granted


184,750



51.16Exercised


(308,021
)


36.53Expired unexercised


(11,000
)


54.76Forfeited


(4,750
)


47.61Outstanding at December 31, 2007


755,682


$
34.88



7.67


$
17,170,998Vested or expected to vest at December 31, 2007


748,952


$
34.81



7.66


$
17,072,619Exercisable at December 31, 2007


391,339


$
29.85



6.93


$
10,884,737   Restricted
    Stock  Performance-Based Awards
      71




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
    WeightedAverageGrant DateShares


Fair ValueNon-vested at January 1, 2007


95,900


$
28.93Granted


86,854



42.13Vested


(3,825
)


28.80Forfeited


(7,865
)


32.65Non-vested at December 31, 2007


171,064


$
35.46Expected to vest at December 31, 2007


164,810   Restricted
    Stock  Time-Based Awards
         WeightedAverageGrant DateShares


Fair ValueNon-vested at January 1, 2007


188,494


$
25.39Granted


24,360


$
51.16Vested


(2,100
)

$
28.76Forfeitures


(1,250
)

$
43.10Non-vested at December 31, 2007


209,504


$
28.25Expected to vest at December 31, 2007


209,159


$
28.24  72




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
  Note 16 
    Commitments and
    Contingencies     cease-and-desist Rules 10b-5, 12b-20, 13a-1, 13a-11, 13a-13
    2001-2003 and/or
   73




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
      Note 17 
    Lease
    Obligations     2008

$
4,4722009


4,1232010


3,8312011


1,6362012


1,6092013 and thereafter


8,317Total minimum lease payments

$
23,988   Note 18 
    Reportable
    Segments and Geographic Information Form 10-K
     74




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
            2007


2006


2005Net SalesInorganics

$
717,605


$
422,496


$
400,921Advanced organics


194,620



151,114



157,195Electronic chemicals


109,276



86,494



59,411$
1,021,501


$
660,104


$
617,527       75




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
  2007


2006


2005Business Segment InformationNet SalesSpecialties

$
1,021,501


$
660,104


$
617,527Operating profit (loss)Specialties

$
232,042


$
115,349


$
36,124Corporate(a)


(35,807
)


(40,090
)


(11,012
)$
196,235


$
75,259


$
25,112Interest expense

$
(7,820
)

$
(38,659
)

$
(41,064
)Loss on redemption of Notes


(21,733
)






Interest income


23,922



8,566



1,904Foreign exchange gain (loss)


8,100



3,661



(4,580
)Gain on sale of investment






12,223



Other (expense) income, net


(449
)


(582
)


8602,020


$
(14,791
)

$
(42,880
)Income (loss) from continuing operations before income taxes,
    minority interest and cumulative effect of change in accounting
    principle

$
198,255


$
60,468


$
(17,768
)Expenditures for property, plant & equipmentSpecialties

$
19,357


$
14,547


$
13,386Depreciation and amortizationSpecialties

$
32,333


$
30,867


$
30,676Corporate


896



974



1,917$
33,229


$
31,841


$
32,593Total assetsSpecialties

$
1,034,025


$
826,488Corporate


41,866



194,054REM


393,319



Assets of discontinued operations






597,682$
1,469,210


$
1,618,224   76




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
  Long-LivedNet Sales(b)


Assets(c)Geographic Region Information2007Finland

$
373,148


$
76,491United States


178,894



47,298Japan


313,195



80Other


156,264



95,273Democratic Republic of the Congo






69,692$
1,021,501


$
288,8342006Finland

$
209,603


$
75,257United States


147,395



32,347Japan


189,493



77Other


113,613



23,047Democratic Republic of the Congo






80,225$
660,104


$
210,9532005Finland

$
171,190United States


177,275Japan


178,887Other


90,175Democratic Republic of the Congo


$
617,527     (a)
    
    In 2006, the Corporate loss includes a $3.2 million charge
    related to the settlement of litigation with the Companys
    former CEO. In 2005, the Corporate loss includes
    $27.5 million of income related to the receipt of net
    insurance proceeds after legal expenses, charges totaling
    $9.6 million related to the departure of the Companys
    former CEO and former CFO and $4.6 million of income
    related to the mark-to-market of 380,000 shares of common
    stock issued in connection with the shareholder derivative
    litigation.(b)
    
    Net sales attributed to the geographic area are based on the
    location of the manufacturing facility, except for Japan, which
    is a sales office.(c)
    
    Long-lived assets consists of property, plant and equipment, net
    and includes a preliminary allocation of $79.7 million
    related to REM. The Company has not yet completed its evaluation
    of the fair value of assets acquired. 77




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
   Note 19 
    Quarterly Results
    of Operations (Unaudited) 2007First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter


Full YearNet sales

$
216,196


$
231,298


$
264,640


$
309,367


$
1,021,501Gross profit

$
72,244


$
83,677


$
73,138


$
84,185


$
313,244Income (loss) from continuing operations

$
(18,541
)

$
44,132


$
39,507


$
46,441


$
111,539Income (loss) from discontinued operations, net of tax


61,019



1,904



(1,412
)


1,546



63,057Gain (loss) on sale of discontinued operations, net of tax


72,289



(19
)










72,270Net income

$
114,767


$
46,017


$
38,095


$
47,987


$
246,866Net income (loss) per common share  basicContinuing operations

$
(0.63
)

$
1.48


$
1.32


$
1.55


$
3.73Discontinued operations


4.48



0.06



(0.05
)


0.05



4.52Net income

$
3.85


$
1.54


$
1.27


$
1.60


$
8.25Net income (loss) per common share  assuming dilutionContinuing operations

$
(0.63
)

$
1.46


$
1.30


$
1.53


$
3.68Discontinued operations


4.48



0.06



(0.04
)


0.05



4.47Net income

$
3.85


$
1.52


$
1.26


$
1.58


$
8.15           78




---



##### Table of Contents



Notes to
    Consolidated Financial Statements
    OM Group, Inc. and
    Subsidiaries  Continued
  2006First


Second


Third


FourthQuarter


Quarter


Quarter


Quarter


Full YearNet sales

$
142,447


$
175,156


$
170,420


$
172,081


$
660,104Gross profit

$
34,154


$
50,535


$
53,175


$
46,803


$
184,667Income (loss) from continuing operations before cumulative
    effect of change in accounting principle

$
2,744


$
24,085


$
13,830


$
(17,036
)

$
23,623Income from discontinued operations, net of tax


15,142



29,030



74,178



73,813



192,163Cumulative effect of change in accounting principle


287















287Net income

$
18,173


$
53,115


$
88,008


$
56,777


$
216,073Net income (loss) per common share  basicContinuing operations

$
0.09


$
0.82


$
0.47


$
(0.58
)

$
0.80Discontinued operations


0.52



0.99



2.53



2.51



6.55Cumulative effect of change in accounting principle


0.01















0.01Net income

$
0.62


$
1.81


$
3.00


$
1.93


$
7.36Net income (loss) per common share  assuming dilutionContinuing operations

$
0.09


$
0.82


$
0.47


$
(0.58
)

$
0.80Discontinued operations


0.52



0.98



2.50



2.51



6.50Cumulative effect of change in accounting principle


0.01















0.01Net income

$
0.62


$
1.80


$
2.97


$
1.93


$
7.31          79




---



##### Table of Contents





Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure  Item 9A.  Controls
    and Procedures Evaluation
    of Disclosure Controls and Procedures
 Rule 13a-15(e)
    Managements
    Report on Internal Control over Financial Reporting
 Rules 13a-15(f) 15d-15(f).
  
    The Company did not maintain effective controls over its
    accounting for income taxes. This material weakness resulted in
    adjustments during the year-end audit process to income tax
    expense and accrued income taxes.        Changes
    in Internal Controls
  80




---



##### Table of Contents



Item 9B.  Other
    Information  81




---



##### Table of Contents



PART III  Item 10.
    Directors,
    Executive Officers of the Registrant and Corporate
    Governance Form 10-K.
      Ohio 44114-1221
   Item 11.  Executive
    Compensation   Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  82




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##### Table of Contents



Equity
    Compensation Plan Information
   Number of securitiesremaining available forfuture issuance underNumber of securities





equity compensation plansto be issued upon


Weighted-average


(excluding securitiesexercise of


exercise price of


issuable underoutstanding options


outstanding options


outstanding options)Equity Compensation Plans Approved by the Stockholders


748,952


$
34.81



2,998,081Equity Compensation Plans Not Approved by the Stockholders(a)


88,934


$
33.67



     (a)
    
    As an inducement to join the Company, on June 30, 2005, the
    Chief Executive Officer was granted options to purchase
    88,934 shares of common stock that are not covered by the
    equity compensation plans approved by the Companys
    stockholders. These options have an exercise price of $33.67 per
    share (the market price of Company stock on the grant date was
    $24.89) and will become exercisable on May 31, 2008 if the
    Chief Executive Officer remains employed by the Company on that
    date. The options have an expiration date of June 13, 2015.  Item 13.
    Certain
    Relationships and Related Transactions, Director
    Independence   Item 14.
    Principal
    Accountant Fees and Services  83




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##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules   Consolidated Balance Sheets at December 31, 2007 and 2006Statements of Consolidated Income for the years ended
    December 31, 2007, 2006 and 2005Statements of Consolidated Comprehensive Income for the years
    ended December 31, 2007, 2006 and 2005Statements of Consolidated Cash Flows for the years ended
    December 31, 2007, 2006 and 2005Statements of Consolidated Stockholders Equity for the
    years ended December 31, 2007, 2006 and 2005Notes to Consolidated Financial Statements      (3)
    Exhibits  Form 10-K:
 (3) Articles of Incorporation and By-laws3.1

Amended and Restated Certificate of Incorporation of the
    Company.3.2

Amended and Restated Bylaws of the Company.(4) Instruments defining rights of security holders
    including indentures.4.1

Form of Common Stock Certificate of the Company.4.2

Revolving Credit Agreement, dated as of December 20, 2005,
    among OM Group, Inc. as the borrower, the lending institutions
    named therein as lenders; National City Bank, as a Lender, the
    Swing Line Lender, the Letter of Credit Issuer, the
    Administrative Agent, the Collateral Agent, the Lead Arranger,
    and the Book Running Manager (incorporated by reference to
    Exhibit 4.6 to the Companys Annual Report on
    Form 10-K
    filed March 9, 2006).4.3

First Amendment to the Revolving Credit Agreement, dated as of
    November 10, 2006, among OM Group, Inc. as the borrower,
    the lending institutions named therein as lenders; National City
    Bank, as a Lender, the Swing Line Lender, the Letter of Credit
    Issuer, the Administrative Agent, the Collateral Agent, the Lead
    Arranger, and the Book Running Manager (incorporated by
    reference to Exhibit 4.4 to the Companys Annual
    Report on
    Form 10-K
    filed February 28, 2007).4.4

Second Amendment to the Revolving Credit Agreement, dated as of
    January 31, 2007, among OM Group, Inc. as the borrower, the
    lending institutions named therein as lenders; National City
    Bank, as a Lender, the Swing Line Lender, the Letter of Credit
    Issuer, the Administrative Agent, the Collateral Agent, the Lead
    Arranger, and the Book Running Manager (incorporated by
    reference to Exhibit 4.5 to the Companys Annual
    Report on
    Form 10-K
    filed February 28, 2007).(10) Material Contracts10.1

Technology Agreement among Outokumpu Oy, Outokumpu Engineering
    Contractors Oy, Outokumpu Research Oy, Outokumpu Harjavalta
    Metals Oy and Kokkola Chemicals Oy dated March 24,
    1993.*10.2

OM Group, Inc. Benefit Restoration Plan, effective
    January 1, 1995 (incorporated by reference to
    Exhibit 10.9 to the Companys Registration Statement
    on
    Form S-4
    (No. 333-84128)
    filed on March 11, 2002). 84




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##### Table of Contents



*10.3

Trust under OM Group, Inc. Benefit Restoration Plan, effective
    January 1, 1995 (incorporated by reference to
    Exhibit 10.10 to the Companys Registration Statement
    on
    Form S-4
    (No. 333-84128)
    filed on March 11, 2002).*10.4

Amendment to OM Group, Inc. Benefit Restoration Plan (frozen
    Post-2004/Pre-2008 Terms) effective as of January 1, 2005.10.5

Stock Purchase Agreement dated as of October 7, 2007 by and
    between Rockwood Specialties Group, Inc. and OM Group, Inc.*10.6

OM Group, Inc. Bonus Program for Key Executives and Middle
    Management.+10.7

Joint Venture Agreement among OMG B.V., Groupe George Forrest
    S.A., La Generale Des Carrieres Et Des Mines and OM Group,
    Inc. to partially or totally process the slag located in the
    site of Lubumbashi, Democratic Republic of Congo (incorporated
    by reference to Exhibit 10.17 to the Companys Annual
    Report on
    Form 10-K
    filed on March 31, 2005).++10.8

Contract for the Sale of Cobalt Copper Concentrate between OMG
    Kokkola Chemicals Oy and Central Trading of Africa Ltd dated
    October 4, 2007.+10.9

Long Term Slag Sales Agreement between La Generale Des
    Carriers Et Des Mines and J.V. Groupement Pour Le
    Traitement Du Terril De Lubumbashi (filed as an Annex to
    Exhibit 10.14).+10.10

Long Term Cobalt Alloy Sales Agreement between J.V. Groupement
    Pour Le Traitement Du Terril De Lubumbashi and OMG Kokkola
    Chemicals Oy (filed as an Annex to Exhibit 10.14).+10.11

Tolling Agreement between Groupement Pour Le Traitement Du
    Terril De Lubumbashi and Societe De Traitement Due Terril De
    Lubumbashi (filed as an Annex to Exhibit 10.14).*10.12

OM Group, Inc. 1998 Long-Term Incentive Compensation Plan
    (incorporated by reference to Exhibit 10.22 to the
    Companys Annual Report on
    Form 10-K
    filed on March 31, 2005).*10.13

Separation Agreement by and between OM Group, Inc. and Thomas R.
    Miklich dated October 17, 2003 (incorporated by reference
    to Exhibit 10.33 to the Companys Annual Report on
    Form 10-K
    filed on March 31, 2005).*10.14

Form of Stock Option Agreement between OM Group, Inc. and Joseph
    M. Scaminace (incorporated by reference to Exhibit 10.37 to
    the Companys Annual Report on
    Form 10-K
    filed on August 22, 2005).*10.15

Form of Restricted Stock Agreement between OM Group, Inc. and
    Joseph M. Scaminace (incorporated by reference to
    Exhibit 10.38 to the Companys Annual Report on
    Form 10-K
    filed on August 22, 2005).*10.16

Employment Agreement by and between OM Group, Inc. and Joseph M.
    Scaminace dated May 26, 2005 (incorporated by reference to
    Exhibit 99 to the Companys Current Report on
    Form 8-K
    filed on June 2, 2005).*10.17

Form of Indemnification Agreement between OM Group, Inc. and its
    directors and certain officers (incorporated by reference to
    Exhibit 10.42 to the Companys Annual Report on
    Form 10-K
    filed on August 22, 2005).*10.18

Employment Agreement by and between OM Group, Inc. and Valerie
    Gentile Sachs dated September 8, 2005 (incorporated by
    reference to Exhibit 10.43 to the Companys Quarterly
    Report on
    Form 10-Q
    filed on November 8, 2005).*10.19

Severance Agreement by and between OM Group, Inc. and Valerie
    Gentile Sachs dated November 7, 2005 (incorporated by
    reference to Exhibit 10.44 to the Companys Quarterly
    Report on
    Form 10-Q
    filed on November 8, 2005).*10.20

Form of Non-Incentive Stock Option Agreement under the 1998
    Long-Term Incentive Compensation Plan (incorporated by reference
    to Exhibit 99.1 to the Companys Current Report on
    Form 8-K
    filed on December 21, 2005). 85




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##### Table of Contents



*10.21

OM Group, Inc. 2002 Stock Incentive Plan (incorporated by
    reference to Exhibit 99 to the Companys Current
    Report on
    Form 8-K
    filed May 5, 2006).*10.22

Form of Restricted Stock Agreement for Joseph M. Scaminace under
    the 1998 Long-Term Incentive Compensation Plan, as amended
    (incorporated by reference to Exhibit 99.1 to the
    Companys Current Report on
    Form 8-K
    filed on August 11, 2006).*10.23

Form of Restricted Stock Agreement (time-based) under the 1998
    Long-Term Incentive Compensation Plan and the 2002 Stock
    Incentive Plan (incorporated by reference to Exhibit 99.2
    to the Companys Current Report on
    Form 8-K
    filed on August 11, 2006).*10.24

Form of Restricted Stock Agreement (performance-based) under the
    1998 Long-Term Incentive Compensation Plan and the 2002 Stock
    Incentive Plan (incorporated by reference to Exhibit 99.3
    to the Companys Current Report on
    Form 8-K
    filed on August 11, 2006).*10.25

Employment Agreement by and between OM Group, Inc. and Kenneth
    Haber dated March 6, 2006 (incorporated by reference to
    Exhibit 10.1 to the Companys Quarterly Report on
    Form 10-Q
    filed on May 9, 2006).*10.26

Form of Severance Agreement between OM Group, Inc. and certain
    executive officers (incorporated by reference to
    Exhibit 99.1 to the Companys Current Report on
    Form 8-K
    filed on November 14, 2006).*10.27

Form of Amended and Restated Change in Control Agreement between
    OM Group, Inc. and certain executive officers (incorporated by
    reference to Exhibit 99.2 to the Companys Current
    Report on
    Form 8-K
    filed on November 14, 2006).*10.28

Amendment No. 1, effective November 13, 2006, to
    Employment Agreement dated May 26, 2005 between Joseph M
    Scaminace and OM Group, Inc. (incorporated by reference to
    Exhibit 99.3 to the Companys Current Report on
    Form 8-K
    filed on November 14, 2006).*10.29

Amended and Restated Change in Control Agreement dated as of
    November 13, 2006 between OM Group, Inc. and Joseph M.
    Scaminace (incorporated by reference to Exhibit 99.4 to the
    Companys Current Report on
    Form 8-K
    filed on November 14, 2006).*10.30

Amended and Restated Severance Agreement dated as of
    November 13, 2006 between OM Group, Inc. and Valerie
    Gentile Sachs (incorporated by reference to Exhibit 99.5 to
    the Companys Current Report on
    Form 8-K
    filed on November 14, 2006).*10.31

Retention and Severance Agreement by and between OM Group, Inc.
    and Marcus P. Bak dated February 9, 2007 (incorporated by
    reference to Exhibit 99.1 to the Companys Current
    Report on
    Form 8-K
    filed on February 15, 2007).10.32

Stock Purchase Agreement Among OMG Kokkola Chemicals Holding
    (Two) BV, OMG Harjavalta Chemicals Holding BV, OMG Finland
    Oy, OM Group, Inc., Norilsk Nickel (Cyprus) Limited And OJSC MMC
    Norilsk Nickel (incorporated by reference to Exhibit 2 to
    the Companys Current Report on
    Form 8-K
    filed on March 7, 2007).*10.33

OM Group, Inc. 2007 Incentive Compensation Plan (incorporated by
    reference to Exhibit 99 to the Companys Quarterly
    Report on
    Form 10-Q
    filed on August 2, 2007).*10.34

Form of Stock Option Agreement under the 2007 Incentive
    Compensation Plan (incorporated by reference to
    Exhibit 10.1 to the Companys Quarterly Report on
    Form 10-Q
    filed on November 2, 2007).*10.35

Form of Restricted Stock Agreement (time-based) under the 2007
    Incentive Compensation Plan (incorporated by reference to
    Exhibit 10.2 to the Companys Quarterly Report on
    Form 10-Q
    filed on November 2, 2007).*10.36

Form of Restricted Stock Agreement (performance-based) under the
    2007 Incentive Compensation Plan (incorporated by reference to
    Exhibit 10.3 to the Companys Quarterly Report on
    Form 10-Q
    filed on November 2, 2007).12

Computation of Ratio of Earnings to Fixed Charges21

List of Subsidiaries 86




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##### Table of Contents



23

Consent of Ernst & Young LLP24

Powers of Attorney31.1

Certification of Principal Executive Officer Pursuant to
    Rule 13a-14(a)31.2

Certification of Principal Financial Officer Pursuant to
    Rule 13a-14(a)32

Certification of Principal Executive Officer and Principal
    Financial Officer Pursuant to 18 U.S.C. 1350      *
    
    Indicates a management contract, executive compensation plan or
    arrangement.+
    
    Portions of Exhibit have been omitted and filed separately with
    the Securities and Exchange Commission in reliance on
    Rule 24b-2
    and an Order from the Commission granting the Companys
    request for confidential treatment dated June 26, 1998.++
    
    Portions of Exhibit have been omitted and filed separately with
    the Securities and Exchange Commission in reliance upon the
    Companys request for confidential treatment in reliance on
    Rule 24b-2.
    
    These documents were filed as exhibits to the Companys
    Form S-1
    Registration Statement (Registration
    No. 33-60444)
    which became effective on October 12, 1993, and are
    incorporated herein by reference. 87




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##### Table of Contents



OM Group,
    Inc.
    Schedule II  Valuation and Qualifying
    Accounts
    Years Ended December 31, 2007, 2006 and 2005
    (Dollars in Millions)
  Balance


Charged


Chargedat


to


to





Balance atBeginning


Costs and


Other





End ofClassifications

of Year


Expenses


Accounts


Deductions


Year2007:Allowance for doubtful accounts

$
1.1



0.5
(1)






(0.1
)(4)

$
1.5Income tax valuation allowance


18.8



3.2
(2)



(2)






22.0Environmental reserve


8.0



4.9
(3)


0.3
(6)


(8.3
)(5)


4.9$
27.9


$
8.6


$
0.3


$
(8.4
)

$
28.42006:Allowance for doubtful accounts

$
1.4



0.5
(1)


(0.1
)(6)


(0.7
)(4)

$
1.1Income tax valuation allowance


78.0











(59.2
)(2)


18.8Environmental reserve


8.8



4.2
(3)


(0.5
)(6)


(4.5
)(5)


8.0$
88.2


$
4.7


$
(0.6
)

$
(64.4
)

$
27.92005:Allowance for doubtful accounts

$
2.0



0.6
(1)


(0.2
)(6)


(1.0
)(4)

$
1.4Income tax valuation allowance


123.1











(45.1
)(2)


78.0Environmental reserve


9.5



2.8
(3)


(0.4
)(6)


(3.1
)(5)


8.8Shareholder litigation accrual


92.0











(92.0
)(7)


$
226.6


$
3.4


$
(0.6
)

$
(141.2
)

$
88.2     (1)
    
    Provision for uncollectible accounts included in selling,
    general and administrative expenses.(2)
    
    Increase (decrease) in valuation allowance is recorded as a
    component of the provision for income taxes.(3)
    
    Provision for environmental costs included in selling, general
    and administrative expenses.(4)
    
    Actual accounts written-off against the allowance.(5)
    
    Actual cash expenditures charged against the accrual.(6)
    
    Foreign currency translation adjustment.(7)
    
    Settlement of shareholder class action and shareholder
    derivative lawsuits. 88




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##### Table of Contents



Signatures  Form 10-K
     By:
    /s/  Kenneth
    Haber     Form 10-K
  Signature

Title/s/  Joseph
    M. ScaminaceJoseph
    M. Scaminace

Chairman and Chief Executive Officer
    (Principal Executive Officer)/s/  Kenneth
    HaberKenneth
    Haber

Chief Financial Officer 
    (Principal Financial Officer)/s/  Robert
    T. PierceRobert
    T. Pierce

Vice President and Corporate Controller
    (Principal Accounting Officer)/s/  Richard
    W. BlackburnRichard
    W. Blackburn

Director/s/  Steven
    J. DemetriouSteven
    J. Demetriou

Director/s/  Katharine
    L. PlourdeKatharine
    L. Plourde

Director/s/  David
    L. PughDavid
    L. Pugh

Director/s/  William
    J. ReidyWilliam
    J. Reidy

Director/s/  Gordon
    A. UlshGordon
    A. Ulsh

Director/s/  Kenneth
    HaberKenneth
    HaberAttorney-in-Fact  89