UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-Q

(Mark One)
  /X/          QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended JULY 3, 2005

                                      OR

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

                      Commission File Number 333-17827-01

                                ISP CHEMCO INC.
            (Exact name of registrant as specified in its charter)


        DELAWARE                                         51-0382622
(State or other Jurisdiction of                         (IRS Employer
Incorporation or Organization)                       Identification No.)


 300 DELAWARE AVENUE, SUITE 303, WILMINGTON, DELAWARE            19801
(Address of principal executive offices)                       (Zip Code)

                                (302) 427-5818
             (Registrant's telephone number, including area code)

                                     NONE
             (Former Name, Former Address and Former Fiscal Year,
                         if Changed Since Last Report)


                      -----------------------------------
                      See Table of Additional Registrants

     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 / /

     Indicate by check mark whether the registrant is an accelerated
filer (as defined in Rule 12b-2 of the Act).   Yes  / /   No  /X/

     As of August 17, 2005, 100 shares of the registrant's common stock (par
value $.01 per share) were outstanding. There is no trading market for the
common stock of the registrant. As of August 17, 2005, each of the additional
registrants had the number of shares outstanding which is shown on the table
below. There is no trading market for the common stock of the additional
registrants. No shares of the registrant or the additional registrants are held
by non-affiliates.


<PAGE>

     THE REGISTRANT AND THE ADDITIONAL REGISTRANTS MEET THE CONDITIONS SET FORTH
IN GENERAL INSTRUCTIONS H(1)(a) AND (b) OF FORM 10-Q AND ARE THEREFORE FILING
THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.

                              ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>

                                                                                                  Address, including zip
                                                                            Commission File       code and telephone
Exact name of registrant as     State or other               No. of         No./ I.R.S.           number, including area
specified in its charter        jurisdiction of              Shares         Employer              code, of registrant's
                                incorporation or             Outstanding    Identification No.    principal executive
                                organization                                                      offices
---------------------------     ----------------             -----------    -----------------     -------------------------
<S>                             <C>                          <C>            <C>                   <C>

ISP Chemicals Inc.              Delaware                     10             333-70144-08/         Route 95 Industrial Area,
                                                                            22-3807357            P.O. Box 37
                                                                                                  Calvert City, KY 42029
                                                                                                  (270) 395-4165

ISP Minerals Inc.               Delaware                     10             333-70144-07/         34 Charles Street
                                                                            22-3807370            Hagerstown, MD 21740
                                                                                                  (301) 733-4000

ISP Technologies                Delaware                     10             333-70144-09/         4501 Attwater Avenue
Inc.                                                                        22-3807372            and State Highway 146
                                                                                                  Texas City, TX 77590
                                                                                                  (409) 945-3411

</TABLE>

<PAGE>



                        PART I - FINANCIAL INFORMATION
                        ITEM 1 - FINANCIAL STATEMENTS


                                ISP CHEMCO INC.

               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                                  (THOUSANDS)
<TABLE>
<CAPTION>


                                      SECOND QUARTER ENDED     SIX MONTHS ENDED
                                      ---------------------  --------------------
                                        JULY 3,     JULY 4,    JULY 3,    JULY 4,
                                         2005        2004       2005       2004
                                      ---------   ---------  ---------  ---------
<S>                                   <C>         <C>        <C>        <C>
Net sales............................ $ 287,085   $ 261,670  $ 571,803  $ 528,565
Cost of products sold................  (192,255)   (166,807)  (368,871)  (335,622)
Selling, general and administrative..   (49,925)    (49,175)  (100,006)   (98,326)
Other operating charges..............         -           -    (10,532)         -
Amortization of intangible assets....      (334)       (367)      (668)      (439)
                                      ---------   ---------  ---------  ---------
Operating income.....................    44,571      45,321     91,726     94,178
Interest expense.....................   (14,158)    (13,475)   (28,011)   (27,559)
Interest income......................       584         490      1,115        987
Other expense, net...................    (5,076)     (2,828)    (9,977)    (4,536)
                                      ---------   ---------  ---------  ---------
Income before income taxes...........    25,921      29,508     54,853     63,070
Income taxes.........................    (8,829)    (10,203)   (18,585)   (21,892)
                                      ---------   ---------  ---------  ---------
Net income........................... $  17,092   $  19,305  $  36,268  $  41,178
                                      =========   =========  =========  =========

</TABLE>
















      The accompanying Notes to Consolidated Financial Statements are an
                       integral part of these statements.


                                       1
<PAGE>


                                ISP CHEMCO INC.

                    CONSOLIDATED BALANCE SHEETS (UNAUDITED)
               (DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

                                                        JULY 3,    DECEMBER 31,
                                                         2005          2004
                                                     -----------   -----------
ASSETS
Current Assets:
  Cash and cash equivalents.......................... $   17,107    $   32,939
  Accounts receivable, trade, less allowance of
    $6,808 and $6,794 at July 3, 2005 and
    December 31, 2004, respectively..................    132,502       105,737
  Accounts receivable, other.........................     29,817        21,464
  Receivables from related parties...................     22,389        15,186
  Inventories........................................    229,725       191,735
  Deferred income tax assets.........................     19,065        14,833
  Prepaid expenses...................................      8,069         6,973
                                                       ---------    ----------
    Total Current Assets.............................    458,674       388,867
Property, plant and equipment, net...................    618,217       599,085
Goodwill, net of accumulated amortization of $180,486    339,775       337,794
Intangible assets, net of accumulated amortization of
  $2,927 and $2,259 at July 3, 2005 and December 31,
  2004, respectively.................................     18,009        18,677
Long-term receivable from related party..............     35,064        34,043
Other assets.........................................     76,288        64,450
                                                      ----------    ----------
Total Assets......................................... $1,546,027    $1,442,916
                                                      ==========    ==========


LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
  Short-term debt...................................  $       72    $       71
  Current maturities of long-term debt..............       2,908         2,932
  Accounts payable..................................      77,219        65,799
  Accrued liabilities...............................      63,793        84,549
  Income taxes payable..............................      46,424        56,484
                                                      ----------    ----------
    Total Current Liabilities.......................     190,416       209,835
                                                      ----------    ----------
Long-term debt less current maturities..............     651,165       649,368
                                                      ----------    ----------
Deferred income tax liabilities.....................     125,926       122,822
                                                      ----------    ----------
Other liabilities...................................      90,110        88,961
                                                      ----------    ----------
Shareholder's Equity:
  Common stock, $.01 par value per share;
    1,000 shares authorized; 100 shares issued
    and outstanding ................................           -             -
  Additional paid-in capital........................     417,763       327,763
  Retained earnings.................................      72,810        36,542
  Accumulated other comprehensive income (loss).....      (2,163)        7,625
                                                      ----------    ----------
    Total Shareholder's Equity......................     488,410       371,930
                                                      ----------    ----------
Total Liabilities and Shareholder's Equity..........  $1,546,027    $1,442,916
                                                      ==========    ==========



      The accompanying Notes to Consolidated Financial Statements are an
                       integral part of these statements.

                                       2
<PAGE>


                                ISP CHEMCO INC.

               CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                  (THOUSANDS)

                                                             SIX MONTHS ENDED
                                                           --------------------
                                                             JULY 3,    JULY 4,
                                                              2005       2004
                                                           --------  ----------

Cash flows from operating activities:
  Net income.............................................  $  36,268  $  41,178
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
      Impairment of fixed assets.........................     10,532          -
      Depreciation.......................................     34,239     31,827
      Amortization of intangible assets..................        668        439
      Noncash interest charges...........................      1,007      1,100
      Deferred income taxes..............................     (1,128)    14,135
  Increase in working capital items......................    (88,588)   (50,316)
  Proceeds from sale of accounts receivable..............      6,242      4,074
  Increase in receivables from related parties...........     (8,224)    (3,559)
  Other, net.............................................      3,174      1,022
                                                           ---------  ---------
Net cash provided by (used in) operating activities......     (5,810)    39,900
                                                           ---------  ---------
Cash flows from investing activities:
  Capital expenditures and acquisitions..................   (100,513)   (58,233)
                                                           ---------  ---------
Net cash used in investing activities....................   (100,513)   (58,233)
                                                           ---------  ---------
Cash flows from financing activities:
  Increase in short-term debt............................          1          -
  Proceeds from issuance of debt.........................          -     31,188
  Increase in borrowings under revolving credit facility.      2,650        400
  Repayments of long-term debt...........................       (970)    (1,472)
  Loans from related party...............................          -     34,000
  Increase in loan to related party......................          -     (7,760)
  Debt issuance costs....................................          -     (1,725)
  Dividend to parent company.............................          -    (67,163)
  Capital contribution from parent company...............     90,000          -
                                                           ---------  ---------
Net cash provided by (used in) financing activities......     91,681    (12,532)
                                                           ---------  ---------
Effect of exchange rate fluctuations on cash
  and cash equivalents...................................     (1,190)      (351)
                                                           ---------  ---------
Net change in cash and cash equivalents..................    (15,832)   (31,216)
Cash and cash equivalents, beginning of period...........     32,939     56,426
                                                           ---------  ---------
Cash and cash equivalents, end of period.................  $  17,107  $  25,210
                                                           =========  =========




      The accompanying Notes to Consolidated Financial Statements are an
                       integral part of these statements.


                                       3
<PAGE>

                                ISP CHEMCO INC.

        CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - (CONTINUED)
                                  (THOUSANDS)


                                                             SIX MONTHS ENDED
                                                           --------------------
                                                             JULY 3,    JULY 4,
                                                              2005       2004
                                                           --------  ----------

Supplemental Cash Flow Information:

  Cash paid during the period for:
    Interest (net of amount capitalized).................   $ 47,433   $ 46,873
    Income taxes (including taxes paid pursuant to
       the Tax Sharing Agreement)........................     28,945     11,056

  Acquisitions:
    Estimated fair market value of assets acquired........  $ 29,578   $ 30,425
    Purchase price of acquisitions........................    28,861     27,284
                                                            --------   --------
    Liabilities assumed...................................  $    717   $  3,141
                                                            ========   ========

Supplemental disclosure of financing activities:

    In April 2004, the Company declared dividends totaling $106.2 million to its
parent company, International Specialty Holdings Inc., including cash dividends
paid of $67.2 million. In connection with these dividends, the Company's total
long-term loan receivable of $39.0 million from a related party was eliminated.
























      The accompanying Notes to Consolidated Financial Statements are an
                       integral part of these statements.


                                       4
<PAGE>

                                ISP CHEMCO INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


     The consolidated financial statements for ISP Chemco Inc. (the "Company")
reflect, in the opinion of management, all adjustments necessary to present
fairly the financial position of the Company and its consolidated subsidiaries
at July 3, 2005, and the results of operations and cash flows for the three- and
six-month periods ended July 3, 2005 and July 4, 2004. All adjustments are of a
normal recurring nature. Certain amounts in the 2004 consolidated financial
statements have been reclassified to conform to the 2005 presentation. These
consolidated financial statements should be read in conjunction with the annual
consolidated financial statements and notes thereto included in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 2004 filed
with the Securities and Exchange Commission on March 31, 2005 (the "2004 Form
10-K").


NOTE 1.  OTHER OPERATING CHARGES

     The Company has implemented a program for the restructuring and
consolidation of production capacity in the foods product line within the
specialty chemicals business segment. In March 2005, the Company entered into a
long-term supply contract with an international company for the purchase of a
product in the specialty chemicals business that the Company currently
manufactures at its San Diego, California alginates plant. Accordingly, the
Company performed an impairment review in the first quarter of 2005 and recorded
a $10.5 million non-cash fixed asset impairment charge related to the San Diego
facility. The impairment charge was determined based on a review of anticipated
future cash flows related to this facility compared with the carrying value of
the facility's fixed assets.


NOTE 2.  COMPREHENSIVE INCOME (LOSS)
<TABLE>
<CAPTION>

                                                Second Quarter Ended     Six Months Ended
                                                --------------------   ---------------------
                                                 July 3,    July 4,     July 3,     July 4,
                                                  2005       2003        2005        2004
                                                --------   --------    ---------   ---------
                                                                (Thousands)
<S>                                             <C>        <C>         <C>         <C>
Net income....................................  $ 17,092   $ 19,305    $  36,268   $  41,178
                                                --------   --------    ---------   ---------
Other comprehensive loss, net of tax:
   Foreign currency translation adjustment....    (4,631)    (2,467)      (9,788)     (3,452)
                                                --------   --------    ---------   ---------
Total other comprehensive loss................    (4,631)    (2,467)      (9,788)     (3,452)
                                                --------   --------    ---------   ---------
Comprehensive income..........................  $ 12,461   $ 16,838    $  26,480   $  37,726
                                                ========   ========    =========   =========

</TABLE>

     Changes in the components of accumulated other comprehensive income (loss)
for the six months ended July 3, 2005 are as follows:


                                       5
<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 2.  COMPREHENSIVE INCOME (LOSS) - (CONTINUED)

                                    Cumulative    Additional
                                    Foreign       Minimum       Accumulated
                                    Currency      Pension       Other
                                    Translation   Liability     Comprehensive
                                    Adjustment    Adjustment    Income (Loss)
                                    -----------   ----------   --------------
                                                  (Thousands)
Balance, December 31, 2004.......   $   16,229    $  (8,604)    $   7,625
Change for the period............       (9,788)           -        (9,788)
                                    ----------    ---------     ---------
Balance, July 3, 2005............   $    6,441    $  (8,604)    $  (2,163)
                                    ==========    =========     =========


NOTE 3.  INVENTORIES

     Inventories comprise the following:

                                         July 3,      December 31,
                                          2005            2004
                                       ---------      ------------
                                              (Thousands)
     Finished goods................     $136,801        $109,366
     Work-in-process...............       50,155          34,665
     Raw materials and supplies....       42,769          47,704
                                        --------        --------
     Inventories...................     $229,725        $191,735
                                        ========        ========

      At July 3, 2005 and December 31, 2004, $65.0 million and $60.4 million,
respectively, of domestic inventories were valued using the LIFO method. If the
FIFO inventory method had been used for these inventories, the value of
inventories would have been $11.7 million and $4.0 million higher at July 3,
2005 and December 31, 2004, respectively.


NOTE 4.  GOODWILL AND INTANGIBLE ASSETS

     The following schedule reconciles the changes in the carrying amount of
goodwill, by business segment, for the six months ended July 3, 2005.
<TABLE>
<CAPTION>


                                        Specialty        Industrial         Mineral        Total
                                        Chemicals        Chemicals         Products       Goodwill
                                       ----------       -----------        ---------     ---------
                                                                 (Thousands)
   <S>                                 <C>              <C>                <C>           <C>
   Balance, December 31, 2004........  $ 286,255        $        -         $  51,539     $ 337,794
   Valuation adjustment - payment of
     contingent consideration........      1,338                 -                 -         1,338
   Translation adjustment............        643                 -                 -           643
                                       ---------        ----------         ---------     ---------
   Balance, July 3, 2005.............  $ 288,236        $        -         $  51,539     $ 339,775
                                       =========        ==========         =========     =========

</TABLE>

     The following is information as of July 3, 2005 and December 31, 2004
related to the Company's acquired intangible assets:

                                       6
<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 4.  GOODWILL AND INTANGIBLE ASSETS - (CONTINUED)
<TABLE>
<CAPTION>

                                                                      July 3, 2005               December 31, 2004
                                                Range of      ----------------------------  ----------------------------
                                              Amortizable     Gross Carrying   Accumulated  Gross Carrying   Accumulated
                                                 Lives            Amount      Amortization      Amount      Amortization
                                              -----------     --------------  ------------  --------------  ------------
                                                                                (Dollars in Thousands)
  <S>                                         <C>               <C>            <C>           <C>             <C>
  Intangible assets subject to amortization:
      Patents...............................   5-20 years      $    669        $   (198)     $    669        $   (170)
      Formulations..........................   5-10 years         2,740            (477)        2,740            (295)
      Unpatented technology.................  10-15 years         1,350            (137)        1,350             (75)
      Customer base.........................  10-15 years         2,348            (245)        2,348            (151)
      Non-compete agreements................   2- 5 years         3,419          (1,754)        3,419          (1,469)
      EPA registrations.....................      5 years           166            (116)          166             (99)
                                                               --------        --------      --------        --------
       Total amortizable intangible assets..                     10,692          (2,927)       10,692          (2,259)
                                                               --------        --------      --------        --------
  Intangible assets not subject
       to amortization:
      Trademarks............................                      5,596               -          5,596              -
      EPA registrations.....................                      4,648               -          4,648              -
                                                               --------        --------      ---------       --------
       Total unamortizable intangible assets                     10,244               -         10,244              -
                                                               --------        --------      ---------       --------
  Total intangible assets...................                   $ 20,936        $ (2,927)     $  20,936       $ (2,259)
                                                               ========        ========      =========       ========

</TABLE>



        Estimated amortization expense:
        Year ending December 31,                              (Thousands)
                                                              -----------
        2005................................................   $   1,336
        2006................................................       1,336
        2007................................................       1,072
        2008................................................       1,072
        2009................................................         774


NOTE 5.  RELATED PARTY TRANSACTIONS

     During the second quarter of 2005, the Company amended its management
agreement (the "Management Agreement"), effective January 1, 2005, whereby the
Company, through a subsidiary, provides certain general management services to
Building Materials Corporation of America ("BMCA"), an affiliate, ISP,
International Specialty Holdings Inc., the Company's parent company, ISP
Investco LLC, and ISP Synthetic Elastomers LP. The purpose of the amendment was
to adjust the management fees payable by the parties under the Management
Agreement. Charges by the Company for the year 2005 for providing such services
under the amended Management Agreement will aggregate approximately $24.9
million.

     In addition, during the second quarter of 2005, a subsidiary of the Company
entered into a management services agreement with Heyman Properties, LLC and
Heyman Investment Associates Limited Partnership (collectively, the "Heyman
Entities"), effective as of January 1, 2005. The term of the management services
agreement is from January 1, 2005 through December 31, 2005, and may be renewed
for additional one-year terms. Under the agreement, the Company will provide
certain general management services, and the Heyman Entities will provide
certain advisory services for specified fees. The Company will receive a net
amount of approximately $0.3 million related to these services in 2005.


                                       7
<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 6.  BENEFIT PLANS

   Defined Benefit Plans

     The Company provides a noncontributory defined benefit retirement plan
for certain hourly employees in the United States (the "Hourly Retirement
Plan"). At several locations, new employees may not participate and benefits
have been frozen for most participants. Benefits under this plan are based on
stated amounts for each year of service. The Company's policy is to fund this
plan consistent with the minimum funding requirements of ERISA.

     ISP Marl GmbH, a wholly-owned German subsidiary of the Company, provides
a noncontributory defined benefit retirement plan for its hourly and salaried
employees (the "ISP Marl Plan"). Benefits under the ISP Marl Plan are based on
average earnings over each employee's career with the Company.

     The Company's net periodic pension cost for the second quarter and first
six months of 2005 and 2004 for the Hourly Retirement Plan included the
following components:
<TABLE>
<CAPTION>

                                               Second Quarter Ended              Six Months Ended
                                              ----------------------         -----------------------
                                               July 3,       July 4,          July 3,        July 4,
                                                2005          2004             2005           2004
                                              --------      -------          -------         -------
                                                                   (Thousands)
   <S>                                        <C>           <C>              <C>             <C>
   Service cost.............................  $    32       $    69          $   96          $  138
   Interest cost............................      536           523           1,063           1,046
   Expected return on plan assets...........     (762)         (736)         (1,526)         (1,472)
   Amortization of actuarial losses.........      158           126             303             252
   Amortization of unrecognized prior
     service cost...........................       61            60             121             120
                                              -------       -------          ------          ------
   Net periodic pension cost................  $    25       $    42          $   57          $   84
                                              =======       =======          ======          ======

</TABLE>


        The Company's net periodic pension cost for the second quarter and first
six months of 2005 and 2004 for the ISP Marl Plan included the following
components:
<TABLE>
<CAPTION>


                                               Second Quarter Ended             Six Months Ended
                                              ----------------------         -----------------------
                                               July 3,       July 4,         July 3,         July 4,
                                                2005          2004            2005            2004
                                              -------       --------         -------         -------
                                                                   (Thousands)
   <S>                                        <C>           <C>              <C>             <C>
   Service cost.............................  $    32       $    23          $   64          $   46
   Interest cost............................       55            48             110              96
   Amortization of actuarial losses.........        4             -               8               -
   Amortization of unrecognized prior
     service cost...........................        1             1               2               2
                                              -------       -------          ------          ------
   Net periodic pension cost................  $    92       $    72          $  184          $  144
                                              =======       =======          ======          ======

</TABLE>

   Postretirement Medical and Life Insurance

     The Company generally does not provide postretirement medical and life
insurance benefits, although it subsidizes such benefits for certain employees
and certain retirees.


                                       8
<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 6.  BENEFIT PLANS - (CONTINUED)

     The net periodic postretirement benefit (income) cost for the second
quarter and first six months of 2005 and 2004 included the following components:
<TABLE>
<CAPTION>


                                              Second Quarter Ended              Six Months Ended
                                              ----------------------         ------------------------
                                               July 3,       July 4,         July 3,          July 4,
                                                2005          2004            2005             2004
                                              --------      --------         -------         --------
                                                                   (Thousands)
   <S>                                        <C>           <C>              <C>             <C>
   Service cost.............................  $     -       $    (9)         $    -          $   17
   Interest cost............................       70            75             140             206
   Amortization of actuarial gains..........      (37)          (33)            (75)            (33)
   Amortization of unrecognized prior
     service cost...........................      (88)          (71)           (175)           (142)
                                              -------       -------          ------          ------
   Net periodic postretirement benefit
      (income) cost.........................  $   (55)      $   (38)         $ (110)         $   48
                                              =======       =======          ======          ======

</TABLE>


       Long-Term Incentive Plans

     The Company has two long-term incentive plans, the 2000 Long-Term
Incentive Plan and the 2003 Executive Long-Term Incentive Plan, which provide
long-term compensation to executives, key management personnel and certain other
employees based on ISP's "Book Value" (as defined in the plans). The value of
incentive units granted under the plans is determined at the end of each fiscal
quarter based on ISP's total Shareholder's Equity. The value on the date of
grant is compared to the value as remeasured at the end of each quarter in order
to determine compensation expense. Compensation expense related to these plans
was $2.5 and $2.4 million for the second quarter of 2005 and 2004, respectively,
and $5.5 and $5.7 million for the first six months of 2005 and 2004,
respectively.








                                       9
<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 7.  BUSINESS SEGMENT INFORMATION
<TABLE>
<CAPTION>

                                               Second Quarter Ended      Six Months Ended
                                               ---------------------   ---------------------
                                                 July 3,    July 4,      July 3,    July 4,
                                                  2005       2004         2005       2004
                                               ---------   ---------    --------  ----------
                                                                (Millions)
<S>                                            <C>         <C>          <C>        <C>
Net sales:
  Specialty Chemicals.......................   $   183.1   $   178.1    $   369.5  $   364.3
  Industrial Chemicals......................        63.7        49.1        122.4       97.8
  Mineral Products (1)......................        40.3        34.5         79.9       66.5
                                               ---------   ---------    ---------  ---------
Net sales...................................   $   287.1   $   261.7    $   571.8  $   528.6
                                               =========   =========    =========  =========

Operating income (loss):
  Specialty Chemicals (2)...................   $    37.9   $    41.6    $    72.8  $    87.8
  Industrial Chemicals......................         0.2        (1.8)         8.0       (1.6)
  Mineral Products..........................         6.5         5.6         11.0        8.1
                                               ---------   ---------    ---------   --------
  Total segment operating income............        44.6        45.4         91.8       94.3
  Unallocated corporate office..............           -        (0.1)        (0.1)      (0.1)
                                               ---------   ---------    ---------  ---------
Total operating income......................        44.6        45.3         91.7       94.2
Interest expense, interest income and
    other expense, net .....................       (18.7)      (15.8)       (36.8)     (31.1)
                                               ---------   ---------    ---------  ---------
Income before income taxes..................   $    25.9   $    29.5    $    54.9  $    63.1
                                               =========   =========    =========  =========

</TABLE>

(1) Includes sales to BMCA and its subsidiaries of $27.3 million and $24.9
    million for the second quarter of 2005 and 2004, respectively, and $54.9
    million and $49.1 million for the first six months of 2005 and 2004,
    respectively.

(2) Operating income for the Specialty Chemicals business segment for the first
    six months of 2005 includes a $10.5 million non-cash charge for the
    impairment of fixed assets. See Note 1.


NOTE 8.  ACQUISITION

     In March 2005, the Company acquired a 1,4-butanediol ("BDO") production
facility in Lima, Ohio, and related working capital. BDO is a key building block
for many of the core specialty chemicals that the Company markets for
pharmaceutical, personal care, food, beverage, coatings, oil field and other
market applications. The preliminary purchase price of the acquisition has been
allocated to the estimated fair value of the assets acquired pending the
determination of any additional contingent consideration. This acquisition is
not expected to be material to the Company's results of operations in 2005.




                                       10
<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 9.  RECENT ACCOUNTING PRONOUNCEMENTS

     In November 2004, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 151, "Inventory Costs,"
an amendment of Accounting Research Bulletin ("ARB") No. 43, Chapter 4, which
discussed the general principles applicable to the pricing of inventory. SFAS
No. 151 amends ARB No. 43, Chapter 4, to clarify that abnormal amounts of idle
facility expense, freight, handling costs, and spoilage should be recognized as
current-period charges. In addition, SFAS No. 151 requires that allocation of
fixed production overheads to the costs of conversion be based on the normal
capacity of the production facilities. SFAS No. 151 will be effective for
inventory costs incurred during fiscal years beginning after June 15, 2005. The
Company does not expect the adoption of SFAS No. 151 to have a material effect
on the Company's consolidated financial statements.

     In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
Assets," an amendment of Accounting Principles Board ("APB") Opinion No. 29.
SFAS No. 153 eliminates the exception from fair value measurement for
nonmonetary exchanges of similar productive assets and replaces it with an
exception for exchanges that do not have commercial substance. A nonmonetary
exchange has commercial substance if the entity's future cash flows are expected
to significantly change as a result of the exchange. SFAS No. 153 will be
effective for nonmonetary asset exchanges occurring in fiscal reporting periods
beginning after June 15, 2005. The Company does not expect the adoption of SFAS
No. 153 to have an immediate effect on the Company's consolidated financial
statements.

     In December 2004, the FASB issued a revised SFAS No. 123 ("SFAS No. 123R"),
"Share-Based Payment." SFAS No. 123R requires that the cost resulting from all
share-based payment transactions be recognized in the financial statements. SFAS
No. 123R establishes fair value as the measurement objective in accounting for
share-based payment arrangements and requires all entities to apply a
fair-value-based measurement method in accounting for share-based payment
transactions with employees. In February 2003, the Company's indirect parent
company, International Specialty Products Inc. ("ISP") completed a going private
transaction. As a result, stock-based compensation plans were terminated and
payments were made in accordance with the terms of the merger agreement. In
addition, the Company currently accounts for incentive units granted to eligible
Company employees pursuant to ISP's 2000 Long-Term Incentive Plan and the 2003
Executive Long-Term Incentive Plan under the accounting prescribed by FASB
Interpretation No. ("FIN") 28, "Accounting for Stock Appreciation Rights and
Other Variable Stock Option and Award Plans." FIN 28 requires an entity to
measure compensation as the amount by which the Book Value (as defined in the
plans) of the incentive units covered by the grant exceeds the option price or
value specified of such incentive units between the date of grant and the
measurement date, resulting in a change in the measure of compensation for the
right or award. Since compensation expense related to such incentive units is
currently included in the actual Consolidated Statement of Operations, the
Company does not expect SFAS No. 123R to have an impact on the Company's
consolidated financial statements.


                                       11
<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 9.  RECENT ACCOUNTING PRONOUNCEMENTS - (CONTINUED)

     In December 2004, the FASB issued FASB Staff Position ("FSP") Nos. FAS
109-1 and FAS 109-2, each as a result of the passage in October 2004 of the
American Jobs Creation Act of 2004 (the "Jobs Act"). FSP No. FAS 109-1 relates
to a provision in the Jobs Act that provides a tax deduction of up to nine
percent (when fully phased-in) on qualified production activities. The FASB
indicated in FSP No. FAS 109-1 that this deduction should be accounted for as a
special deduction in accordance with SFAS No. 109, "Accounting for Income
Taxes," rather than as a tax rate reduction. This FSP was effective upon
issuance. The Company does not expect the adoption of this FSP to have a
material effect on its 2005 consolidated financial statements.

     FSP No. FAS 109-2 relates to a provision in the Jobs Act that introduces a
special one-time dividends received deduction on the repatriation of certain
foreign earnings to a U.S. taxpayer, provided certain criteria are met. This FSP
was effective upon issuance. This FSP will not have an impact on the Company's
consolidated financial statements.

     In March 2005, the FASB issued FIN 47, "Accounting for Conditional Asset
Retirement Obligations," an interpretation of SFAS No. 143, "Accounting for
Asset Retirement Obligations." SFAS No. 143 states that an entity shall
recognize the fair value of a liability for an asset retirement obligation
("ARO") in the period in which it is incurred if a reasonable estimate of fair
value can be made. The term "conditional asset retirement obligation" refers to
a legal obligation to perform an asset retirement activity in which the timing
and/or method of settlement are conditional on a future event that may or may
not be within the control of the entity. FIN 47 states that if an entity has
sufficient information to reasonably estimate the fair value of an ARO, it must
recognize a liability at the time the liability is incurred. An entity would
have sufficient information to apply an expected present value and therefore an
ARO would be reasonably estimable if either of the following conditions exist:
(a) the settlement date and method of settlement for the ARO have been specified
by others, such as by law, regulation or contract or (b) the information is
available to reasonably estimate the settlement date or the range of potential
settlement dates, the method of settlement, and the probabilities associated
with the potential settlement dates and methods of settlements. FIN 47 will be
effective for the Company as of December 31, 2005. The Company is currently
reviewing its AROs to determine the potential impact of FIN 47 on its
consolidated financial statements, and, at this time, the Company does not
believe that FIN 47 will have a material impact on the Company's consolidated
financial statements.

     In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections." SFAS No. 154 eliminates the requirement in APB Opinion No. 20,
"Accounting Changes," to include the cumulative effect of changes in accounting
principles in the Consolidated Statement of Operations in the period of change.
Instead, SFAS No. 154 requires that changes in accounting principles be
retrospectively applied, whereby the new accounting principle is applied to
prior accounting periods as if that principle had always been used. SFAS No. 154
also redefines "restatement" as the revision of previously issued financial
statements to reflect the correction of an error. SFAS No. 154 is effective for
accounting changes and corrections of errors made in

                                       12
<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 9.  RECENT ACCOUNTING PRONOUNCEMENTS - (CONTINUED)

fiscal years beginning after December 15, 2005, although early adoption is
permitted for accounting changes and correction of errors made after the date
SFAS No. 154 was issued. SFAS No. 154 does not change the transition provisions
of any existing accounting pronouncements.


NOTE 10. GUARANTOR FINANCIAL INFORMATION

     In 2001, the Company and three of its wholly-owned subsidiaries jointly
issued, in three separate transactions, a total of $405.0 million aggregate
principal amount of 10 1/4% Senior Subordinated Notes due 2011 (the "2011
Notes"). The 2011 Notes are guaranteed by all of the Company's domestic
subsidiaries, other than certain immaterial subsidiaries and the Company's
accounts receivable financing subsidiary. These guarantees are full,
unconditional and joint and several.

     ISP Global Technologies Inc., which is a guarantor of the 2011 Notes, is
party to a License and Royalty Agreement with non-guarantor foreign affiliates.
Under this agreement, ISP Global Technologies granted a license to certain
non-guarantor foreign affiliates for the use of the patent rights, know-how and
trademarks in connection with the manufacture, use and sale of the Company's
products.

     Presented below is condensed consolidating financial information for the
Company, the guarantor subsidiaries and the non-guarantor subsidiaries. This
financial information should be read in conjunction with the consolidated
financial statements and other notes related thereto.















                                       13
<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 10. GUARANTOR FINANCIAL INFORMATION - (CONTINUED)

<TABLE>
<CAPTION>

                                ISP CHEMCO INC.
                CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                       SECOND QUARTER ENDED JULY 3, 2005
                                  (THOUSANDS)

                                                                          Non-
                                             Parent      Guarantor     Guarantor
                                             Company    Subsidiaries  Subsidiaries  Eliminations    Consolidated
                                            ---------   ------------  ------------  ------------    ------------
<S>                                         <C>         <C>           <C>           <C>             <C>
Net sales ................................  $       -   $  138,734    $  148,351    $        -      $  287,085
Intercompany net sales ...................          -       72,040         4,746       (76,786)              -
                                            ---------   ----------    ----------    ----------      ----------
   Total net sales .......................          -      210,774       153,097       (76,786)        287,085
                                            ---------   ----------    ----------    ----------      ----------
Cost of products sold ....................          -     (164,511)     (104,530)       76,786        (192,255)
Selling, general and administrative ......          -      (29,055)      (20,870)                      (49,925)
Amortization of intangible assets.........          -         (334)            -                          (334)
                                            ---------   ----------    ----------    ----------      ----------

Operating income .........................          -       16,874        27,697             -          44,571
Equity in income of subsidiaries..........     18,296            -             -       (18,296)              -
Intercompany royalty income (expense).....          -       11,067       (11,067)                            -
Intercompany dividend income .............          -        1,818             -        (1,818)              -
Interest expense .........................        946      (15,298)          194                       (14,158)
Interest income ..........................          -           69           515                           584
Other expense, net .......................         (1)      (1,784)       (3,291)                       (5,076)
                                            ---------   ----------    ----------    ----------      ----------
Income before income taxes ...............     19,241       12,746        14,048       (20,114)         25,921
Income taxes .............................       (331)      (4,807)       (3,691)                       (8,829)
                                            ---------   ----------    ----------    ----------      ----------
Net income ...............................  $  18,910   $    7,939    $   10,357    $  (20,114)     $   17,092
                                            =========   ==========    ==========    ==========      ==========

</TABLE>


<TABLE>
<CAPTION>


                                ISP CHEMCO INC.
                CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                       SECOND QUARTER ENDED JULY 4, 2004
                                  (THOUSANDS)

                                                                          Non-
                                             Parent      Guarantor     Guarantor
                                             Company    Subsidiaries  Subsidiaries  Eliminations    Consolidated
                                            ---------   ------------  ------------  ------------    ------------
<S>                                         <C>         <C>           <C>           <C>             <C>
Net sales ................................  $       -   $  122,988    $  138,682    $        -      $  261,670
Intercompany net sales ...................          -       61,901         4,175       (66,076)              -
                                            ---------   ----------    ----------    ----------      ----------
   Total net sales .......................          -      184,889       142,857       (66,076)        261,670
                                            ---------   ----------    ----------    ----------      ----------
Cost of products sold ....................          -     (133,564)      (99,319)       66,076        (166,807)
Selling, general and administrative ......          -      (29,850)      (19,325)                      (49,175)
Amortization of intangible assets.........          -         (367)            -                          (367)
                                            ---------   ----------    ----------    ----------      ----------

Operating income .........................          -       21,108        24,213             -          45,321
Equity in income of subsidiaries..........     20,406            -             -       (20,406)              -
Intercompany royalty income (expense).....          -       10,320       (10,320)                            -
Intercompany dividend income .............          -        1,493             -        (1,493)              -
Interest expense .........................        606      (14,068)          (13)                      (13,475)
Interest income ..........................          -            6           484                           490
Other expense, net .......................         (3)      (1,426)       (1,399)                       (2,828)
                                            ---------   ----------    ----------    ----------      ----------
Income before income taxes ...............     21,009       17,433        12,965       (21,899)         29,508
Income taxes .............................       (211)      (7,492)       (2,500)                      (10,203)
                                            ---------   ----------    ----------    ----------      ----------
Net income ...............................  $  20,798   $    9,941    $   10,465    $  (21,899)     $   19,305
                                            =========   ==========    ==========    ==========      ==========

</TABLE>



                                       14
<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 10. GUARANTOR FINANCIAL INFORMATION - (CONTINUED)

<TABLE>
<CAPTION>

                                ISP CHEMCO INC.
                CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                         SIX MONTHS ENDED JULY 3, 2005
                                  (THOUSANDS)


                                                                          Non-
                                             Parent      Guarantor     Guarantor
                                             Company    Subsidiaries  Subsidiaries  Eliminations    Consolidated
                                            ---------   ------------  ------------  ------------    ------------
<S>                                         <C>         <C>           <C>           <C>             <C>
Net sales ................................  $       -   $  269,373    $  302,430    $        -      $  571,803
Intercompany net sales ...................          -      133,732         9,622      (143,354)              -
                                            ---------   ----------    ----------    ----------      ----------
   Total net sales .......................          -      403,105       312,052      (143,354)        571,803
                                            ---------   ----------    ----------    ----------      ----------
Cost of products sold ....................          -     (307,761)     (204,464)      143,354        (368,871)
Selling, general and administrative ......          -      (58,758)      (41,248)                     (100,006)
Other operating charges...................          -      (10,532)            -                       (10,532)
Amortization of intangible assets.........          -         (668)            -                          (668)
                                            ---------   ----------    ----------    ----------      ----------

Operating income .........................          -       25,386        66,340             -          91,726
Equity in income of subsidiaries..........     38,750            -             -       (38,750)              -
Intercompany royalty income (expense).....          -       22,870       (22,870)                            -
Intercompany dividend income .............          -        3,659             -        (3,659)              -
Interest expense .........................      1,813      (30,294)          470                       (28,011)
Interest income ..........................          -           85         1,030                         1,115
Other expense, net .......................         (2)      (4,200)       (5,775)                       (9,977)
                                            ---------   ----------    ----------    ----------      ----------
Income before income taxes ...............     40,561       17,506        39,195       (42,409)         54,853
Income taxes .............................       (634)      (9,795)       (8,156)                      (18,585)
                                            ---------   ----------    ----------    ----------      ----------
Net income ...............................  $  39,927   $    7,711    $   31,039    $  (42,409)     $   36,268
                                            =========   ==========    ==========    ==========      ==========
</TABLE>


<TABLE>
<CAPTION>


                                ISP CHEMCO INC.
                CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                         SIX MONTHS ENDED JULY 4, 2004
                                  (THOUSANDS)


                                                                          Non-
                                             Parent      Guarantor     Guarantor
                                             Company    Subsidiaries  Subsidiaries  Eliminations    Consolidated
                                            --------    ------------  ------------  ------------    ------------
<S>                                         <C>         <C>           <C>           <C>             <C>
Net sales ................................  $       -   $  248,347    $  280,218    $        -      $  528,565
Intercompany net sales ...................          -      122,646         8,510      (131,156)              -
                                            ---------   ----------    ----------    ----------      ----------
   Total net sales .......................          -      370,993       288,728      (131,156)        528,565
                                            ---------   ----------    ----------    ----------      ----------
Cost of products sold ....................          -     (272,342)     (194,436)      131,156        (335,622)
Selling, general and administrative ......          -      (61,758)      (36,568)                      (98,326)
Amortization of intangible assets.........          -         (439)            -                          (439)
                                            ---------   ----------    ----------    ----------      ----------

Operating income .........................          -       36,454        57,724             -          94,178
Equity in income of subsidiaries..........     43,432            -             -       (43,432)              -
Intercompany royalty income (expense).....          -       21,404       (21,404)                            -
Intercompany dividend income .............          -        3,175             -        (3,175)              -
Interest expense .........................      1,421      (29,168)          188                       (27,559)
Interest income ..........................          -           18           969                           987
Other expense, net .......................         (4)      (2,243)       (2,289)                       (4,536)
                                            ---------   ----------    ----------    ----------      ----------
Income before income taxes ...............     44,849       29,640        35,188       (46,607)         63,070
Income taxes .............................       (496)     (15,216)       (6,180)                      (21,892)
                                            ---------   ----------    ----------    ----------      ----------
Net income ...............................  $  44,353   $   14,424    $   29,008    $  (46,607)     $   41,178
                                            =========   ==========    ==========    ==========      ==========

</TABLE>


                                       15
<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 10. GUARANTOR FINANCIAL INFORMATION - (CONTINUED)

<TABLE>
<CAPTION>

                                ISP CHEMCO INC.
                     CONDENSED CONSOLIDATING BALANCE SHEET
                                 JULY 3, 2005
                                  (THOUSANDS)

                                                                          Non-
                                             Parent      Guarantor     Guarantor
                                             Company    Subsidiaries  Subsidiaries  Eliminations     Consolidated
                                            ---------   ------------  ------------  ------------     ------------
<S>                                         <C>         <C>           <C>            <C>             <C>
ASSETS
Current Assets:
   Cash and cash equivalents .............  $       2   $      139    $  16,966      $        -      $    17,107
   Accounts receivable, trade, net .......          -        9,999      122,503                          132,502
   Accounts receivable, other ............          -        2,780       27,037                           29,817
   Receivables from related parties.......          -       22,389            -                           22,389
   Inventories ...........................          -      136,879       92,846                          229,725
   Deferred income tax assets.............          -       19,065            -                           19,065
   Prepaid expenses ......................          -        5,683        2,386                            8,069
                                            ---------   ----------    ---------      ----------      -----------
     Total current assets ................          2      196,934      261,738               -          458,674
Investment in subsidiaries ...............    376,658      240,200            -        (616,858)               -
Intercompany loans .......................     21,819      (14,392)      (7,427)                               -
Due from (to) subsidiaries, net ..........          -       63,685      (63,685)                               -
Property, plant and equipment, net .......          -      530,145       88,072                          618,217
Goodwill, net ............................     89,931      240,928        8,916                          339,775
Intangible assets, net....................          -       18,009            -                           18,009
Long-term receivable from related party ..          -            -       35,064                           35,064
Other assets .............................          -       75,780          508                           76,288
                                            ---------   ----------    ---------      ----------      -----------
Total Assets .............................  $ 488,410   $1,351,289    $ 323,186      $ (616,858)     $ 1,546,027
                                            =========   ==========    =========      ==========      ===========


LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
   Short-term debt .......................  $       -   $        -    $      72      $        -      $        72
   Current maturities of long-term debt ..          -        2,765          143                            2,908
   Accounts payable ......................          -       44,446       32,773                           77,219
   Accrued liabilities ...................          -       42,772       21,021                           63,793
   Income taxes payable...................          -       38,806        7,618                           46,424
                                            ---------   ----------    ---------      ----------      -----------
     Total Current liabilities ...........          -      128,789       61,627               -          190,416
Long-term debt less current maturities ...          -      650,851          314                          651,165
Deferred income tax liabilities...........          -      111,676       14,250                          125,926
Other liabilities ........................          -       83,315        6,795                           90,110
Total Shareholder's Equity ...............    488,410      376,658      240,200        (616,858)         488,410
                                            ---------   ----------    ---------      ----------      -----------
Total Liabilities and Shareholder's
   Equity ................................  $ 488,410   $1,351,289    $ 323,186      $ (616,858)     $ 1,546,027
                                            =========   ==========    =========      ==========      ===========

</TABLE>







                                       16
<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 10. GUARANTOR FINANCIAL INFORMATION - (CONTINUED)

<TABLE>
<CAPTION>


                                ISP CHEMCO INC.
                     CONDENSED CONSOLIDATING BALANCE SHEET
                               DECEMBER 31, 2004
                                  (THOUSANDS)


                                                                            Non-
                                             Parent      Guarantor       Guarantor
                                             Company    Subsidiaries    Subsidiaries   Eliminations    Consolidated
                                            ---------   ------------    ------------   ------------    ------------
<S>                                         <C>          <C>             <C>           <C>             <C>
ASSETS
Current Assets:
   Cash and cash equivalents .............  $       1    $   14,659      $  18,279     $        -      $    32,939
   Accounts receivable, trade, net .......          -         4,870        100,867                         105,737
   Accounts receivable, other ............          -         2,155         19,309                          21,464
   Receivables from related parties.......        (38)       15,224              -                          15,186
   Inventories ...........................          -       108,810         82,925                         191,735
   Deferred income tax assets.............          -        14,833              -                          14,833
   Prepaid expenses ......................          -         4,782          2,191                           6,973
                                            ---------    ----------      ---------     ----------      -----------
     Total current assets ................        (37)      165,333        223,571              -          388,867
Investment in subsidiaries ...............    310,959       226,870              -       (537,829)               -
Intercompany loans .......................     21,337       (12,848)        (8,489)                              -
Due from (to) subsidiaries, net ..........          -        46,539        (46,539)                              -
Property, plant and equipment, net .......          -       500,700         98,385                         599,085
Goodwill, net ............................     89,931       240,928          6,935                         337,794
Intangible assets, net ...................          -        18,677              -                          18,677
Long-term receivable from related party ..          -             -         34,043                          34,043
Other assets .............................          -        63,920            530                          64,450
                                            ---------    ----------      ---------     ----------      -----------
Total Assets .............................  $ 422,190    $1,250,119      $ 308,436     $ (537,829)     $ 1,442,916
                                            =========    ==========      =========     ==========      ===========



LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
   Short-term debt .......................  $       -    $        -      $      71     $        -      $        71
   Current maturities of long-term debt ..          -         2,766            166                           2,932
   Accounts payable ......................          -        45,554         20,245                          65,799
   Accrued liabilities ...................          -        52,737         31,812                          84,549
   Income taxes payable...................     50,260             -          6,224                          56,484
                                            ---------    ----------      ---------     ----------      -----------
     Total Current liabilities ...........     50,260       101,057         58,518              -          209,835
Long-term debt less current maturities ...          -       648,940            428                         649,368
Deferred income tax liabilities...........          -       106,852         15,970                         122,822
Other liabilities ........................          -        82,311          6,650                          88,961
Total Shareholder's Equity ...............    371,930       310,959        226,870       (537,829)         371,930
                                            ---------    ----------      ---------     ----------      -----------
Total Liabilities and Shareholder's
   Equity ................................  $ 422,190    $1,250,119      $ 308,436     $ (537,829)     $ 1,442,916
                                            =========    ==========      =========     ==========      ===========


</TABLE>







                                       17
<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 10. GUARANTOR FINANCIAL INFORMATION - (CONTINUED)

<TABLE>
<CAPTION>

                                ISP CHEMCO INC.
                CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW
                         SIX MONTHS ENDED JULY 3, 2005
                                  (THOUSANDS)


                                                                                              Non-
                                                             Parent        Guarantor       Guarantor
                                                             Company      Subsidiaries    Subsidiaries      Consolidated
                                                            ----------    ------------    ------------      ------------
<S>                                                         <C>            <C>             <C>                <C>
Cash flows from operating activities:
  Net income (loss).......................................  $  (2,482)     $    7,711      $    31,039        $  36,268
  Adjustments to reconcile net income (loss) to net cash
     provided by (used in) operating activities:
     Impairment of fixed assets...........................          -          10,532                -           10,532
     Depreciation.........................................          -          27,275            6,964           34,239
     Amortization of intangible assets....................          -             668                -              668
     Noncash interest charges.............................          -           1,007                -            1,007
     Deferred income taxes................................          -             592           (1,720)          (1,128)
  Increase in working capital items.......................          -         (43,125)         (45,463)         (88,588)
  Proceeds from sale of accounts receivable...............          -               -            6,242            6,242
  Increase in receivables from related parties............        (38)         (7,165)          (1,021)          (8,224)
  Change in amounts due to (from) subsidiaries............          -         (17,146)          17,146                -
  Change in investment in and advances to affiliates......    (86,997)         91,259           (4,262)               -
  Other, net..............................................          -           2,856              318            3,174
                                                            ---------      ----------      -----------        ---------
Net cash provided by (used in) operating activities.......    (89,517)         74,464            9,243           (5,810)
                                                            ---------      ----------      -----------        ---------
Cash flows from investing activities:
  Capital expenditures and acquisition....................          -         (95,967)          (4,546)        (100,513)
                                                            ---------      ----------      -----------        ---------
Net cash used in investing activities.....................          -         (95,967)          (4,546)        (100,513)
                                                            ---------      ----------      -----------        ---------
Cash flows from financing activities:
  Increase in short-term debt.............................          -               -                1                1
  Increase in borrowings under revolving credit facility.           -           2,650                -            2,650
  Repayments of long-term debt............................          -            (870)            (100)            (970)
  Change in net intercompany loans........................       (482)          1,544           (1,062)               -
  Intercompany dividends..................................          -           3,659           (3,659)               -
  Capital contribution from parent company................     90,000               -                -           90,000
                                                            ---------      ----------      -----------        ---------
Net cash provided by (used in) financing activities.......     89,518           6,983           (4,820)          91,681
                                                            ---------      ----------      -----------        ---------
Effect of exchange rate fluctuations on cash and cash
  equivalents.............................................          -               -           (1,190)          (1,190)
                                                            ---------      ----------      -----------        ---------
Net change in cash and cash equivalents...................          1         (14,520)          (1,313)         (15,832)
Cash and cash equivalents, beginning of period............          1          14,659           18,279           32,939
                                                            ---------      ----------      -----------        ---------
Cash and cash equivalents, end of period..................  $       2      $      139      $    16,966        $  17,107
                                                            =========      ==========      ===========        =========

</TABLE>



                                       18
<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 10. GUARANTOR FINANCIAL INFORMATION - (CONTINUED)

<TABLE>
<CAPTION>

                                ISP CHEMCO INC.
                CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW
                         SIX MONTHS ENDED JULY 4, 2004
                                  (THOUSANDS)


                                                                                              Non-
                                                             Parent        Guarantor       Guarantor
                                                             Company      Subsidiaries    Subsidiaries      Consolidated
                                                            ---------     ------------    ------------      ------------
<S>                                                         <C>           <C>             <C>                <C>
Cash flows from operating activities:
  Net income..............................................  $  (2,254)    $   14,424      $    29,008        $  41,178
  Adjustments to reconcile net income to net cash
     provided by (used in) operating activities:
     Depreciation.........................................          -         24,876            6,951           31,827
     Amortization of intangible assets....................          -            439                -              439
     Noncash interest charges.............................          -          1,100                -            1,100
     Deferred income taxes................................          -         13,762              373           14,135
  Increase in working capital items.......................     (1,205)       (31,279)         (17,832)         (50,316)
  Proceeds from sale of accounts receivable...............          -              -            4,074            4,074
  Increase in receivables from related parties............          -         (2,443)          (1,116)          (3,559)
  Change in amounts due to (from) subsidiaries............          -          7,589           (7,589)               -
  Change in investment in and advances to affiliates......      4,126         (6,846)           2,720                -
  Other, net..............................................       (668)         1,855             (165)           1,022
                                                            ---------     ----------      -----------        ---------
Net cash provided by (used in) operating activities.......         (1)        23,477           16,424           39,900
                                                            ---------     ----------      -----------        ---------
Cash flows from investing activities:
  Capital expenditures and acquisitions...................          -        (40,756)         (17,477)         (58,233)
                                                            ---------     ----------      -----------        ---------
Net cash used in investing activities.....................          -        (40,756)         (17,477)         (58,233)
                                                            ---------     ----------      -----------        ---------
Cash flows from financing activities:
  Proceeds from issuance of debt..........................          -         31,188                -           31,188
  Increase in borrowings under revolving credit facility.           -            400                -              400
  Repayments of long-term debt............................          -         (1,420)             (52)          (1,472)
  Loans from related party................................          -          4,000           30,000           34,000
  Increase in loan to related party.......................          -         (7,760)               -           (7,760)
  Change in net intercompany loans........................          -         29,641          (29,641)               -
  Debt issuance costs.....................................          -         (1,725)               -           (1,725)
  Intercompany dividends..................................     67,163        (63,988)          (3,175)               -
  Dividend to parent company..............................    (67,163)             -                -          (67,163)
                                                            ---------     ----------      -----------        ---------
Net cash used in financing activities.....................          -         (9,664)          (2,868)         (12,532)
                                                            ---------     ----------      -----------        ---------
Effect of exchange rate fluctuations on cash and cash
  equivalents.............................................          -              -             (351)            (351)
                                                            ---------     ----------      -----------        ---------
Net change in cash and cash equivalents...................         (1)       (26,943)          (4,272)         (31,216)
Cash and cash equivalents, beginning of period............          5         29,009           27,412           56,426
                                                            ---------     ----------      -----------        ---------
Cash and cash equivalents, end of period..................  $       4     $    2,066      $    23,140        $  25,210
                                                            =========     ==========      ===========        =========

</TABLE>

                                       19
<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 11.  CONTINGENCIES

     For information regarding contingencies, reference is made to Note 21 to
consolidated financial statements contained in the 2004 Form 10-K.

Environmental Litigation

     The Company, together with other companies, is a party to a variety of
proceedings and lawsuits involving environmental matters ("Environmental
Claims") under the Comprehensive Environmental Response Compensation and
Liability Act, Resource Conservation and Recovery Act and similar state laws, in
which recovery is sought for the cost of cleanup of contaminated sites or in
which remedial obligations are imposed. A number of these Environmental Claims
are in the early stages or have been dormant for protracted periods.

     While the Company cannot predict whether adverse decisions or events can
occur in the future, in the opinion of the Company's management, the resolution
of the Environmental Claims should not be material to the business, liquidity,
results of operations, cash flows or financial position of the Company. However,
adverse decisions or events, particularly as to increases in remedial costs,
discovery of new contamination, assertion of natural resource damages, plans for
development of the Company's Linden, New Jersey property, and the liability and
the financial responsibility of the Company's insurers and of the other parties
involved at each site and their insurers, could cause the Company to increase
the estimate of its liability or decrease the estimate of insurance recoveries
in respect of those matters. It is not currently possible to estimate the amount
or range of any additional liability.

Tax Claim Against G-I Holdings Inc.

     The predecessor of ISP and certain of its domestic subsidiaries were
parties to tax sharing agreements with members of a consolidated group for
federal income tax purposes that included G-I Holdings Inc. (the "G-I Holdings
Group") in certain prior years. Until January 1, 1997, ISP and its domestic
subsidiaries were included in the consolidated federal income tax returns of the
G-I Holdings Group and, accordingly, would be severally liable for any tax
liability of the G-I Holdings Group in respect of those prior years. Those tax
sharing agreements are no longer applicable with respect to the tax liabilities
of ISP for periods subsequent to January 1, 1997, because neither the Company
nor any of its domestic subsidiaries have been members of the G-I Holdings Group
for periods after January 1, 1997. In January 2001, G-I Holdings filed a
voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy
Code due to its asbestos-related bodily injury claims relating to the inhalation
of asbestos fiber.

     On September 15, 1997, G-I Holdings received a notice from the Internal
Revenue Service ("IRS") of a deficiency in the amount of $84.4 million (after
taking into account the use of net operating losses and foreign tax credits
otherwise available for use in later years) in connection with the formation in
1990 of Rhone-Poulenc Surfactants and Specialties, L.P. (the "Surfactants
Partnership"), a partnership in which G-I Holdings held an interest. On
September 21, 2001, the IRS filed a proof of claim with respect to such
deficiency in the


                                       20
<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 11.  CONTINGENCIES - (CONTINUED)

G-I Holdings bankruptcy against G-I Holdings and ACI Inc., a subsidiary of G-I
Holdings which also held an interest in the Surfactants Partnership and also has
filed a voluntary petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code. If the proof of claim is sustained, ISP and/or certain of its
subsidiaries together with G-I Holdings and several current and former
subsidiaries of G-I Holdings would be severally liable for taxes and interest in
the amount of approximately $301 million, computed as of July 3, 2005. On May 7,
2002, G-I Holdings, together with ACI Inc., filed an objection to the proof of
claim, which objection will be heard by the United States District Court for the
District of New Jersey overseeing the G-I Holdings bankruptcy. G-I Holdings has
advised the Company that it believes that it will prevail in this tax matter
involving the Surfactants Partnership, although there can be no assurance in
this regard. The Company believes that the ultimate disposition of this matter
will not have a material adverse effect on its business, financial position or
results of operations. For additional information relating to G-I Holdings,
reference is made to Notes 7 and 21 to consolidated financial statements
contained in the 2004 Form 10-K.





















                                       21
<PAGE>


           ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                     CONDITION AND RESULTS OF OPERATIONS


     Unless otherwise indicated by the context, "we," "us" and "our" refer to
ISP Chemco Inc. and its consolidated subsidiaries.


CRITICAL ACCOUNTING POLICIES

      There have been no significant changes in our critical accounting
policies during the first six months of 2005. For a discussion of our critical
accounting policies, reference is made to the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included in our
Annual Report on Form 10-K for the fiscal year ended December 31, 2004 filed
with the Securities and Exchange Commission on March 31, 2005.


RESULTS OF OPERATIONS - SECOND QUARTER 2005 COMPARED WITH
                        SECOND QUARTER 2004

     Overview

     We recorded net income of $17.1 million for the second quarter of 2005
compared with net income of $19.3 million in the second quarter of 2004. The
lower results for the second quarter of 2005 were mainly attributable to higher
other expense, net, due to unfavorable foreign exchange, and also due to lower
operating income and higher interest expense.

     Net Sales.  Net sales by business segment for the second quarter of 2005
and 2004 were:

                                                       Second Quarter Ended
                                                    ---------------------------
                                                      July 3,           July 4,
                                                       2005              2004
                                                    ---------        ----------
                                                            (Millions)
           Specialty chemicals....................  $   183.1        $   178.1
           Industrial chemicals...................       63.7             49.1
           Mineral products.......................       40.3             34.5
                                                    ---------        ---------
             Net sales............................  $   287.1        $   261.7
                                                    =========        =========

     Net sales for the second quarter of 2005 were $287.1 million compared
with $261.7 million in the second quarter of 2004. The $25.4 million (10%)
increase in sales resulted primarily from higher pricing and the favorable
impact of the weaker U.S. dollar.

     Gross Margin. Our gross margin in the second quarter of 2005 was 33.0%
compared with 36.3% in the second quarter of 2004. The lower margin was
attributable to higher material, energy and manufacturing costs in all business
segments, partially offset by favorable pricing and the favorable impact of the
weaker U.S. dollar. Manufacturing costs in the second quarter of 2005 were
adversely impacted by plant integration costs for the Lima, Ohio production
facility acquired in the first quarter of 2005 (see further discussion below).

                                       22
<PAGE>

     Selling, General and Administrative. Selling, general and administrative
expenses increased 1.5% in the second quarter of 2005 to $49.9 million from
$49.2 million in the second quarter of 2004; however, as a percent of sales,
these expenses decreased to 17.4% in the second quarter of 2005 from 18.8% in
the second quarter of 2004. The increase in selling, general and administrative
expenses in the second quarter of 2005 related primarily to higher freight and
distribution costs as a result of the higher sales levels.

     Operating Income.  Operating income (loss) by business segment for the
second quarter of 2005 and 2004 was:

                                                       Second Quarter Ended
                                                    --------------------------
                                                      July 3,          July 4,
                                                       2005             2004
                                                    ---------        ---------
                                                            (Millions)
           Specialty chemicals....................  $    37.9        $    41.6
           Industrial chemicals...................        0.2             (1.8)
           Mineral products.......................        6.5              5.6
                                                    ---------        ---------
             Total segment operating income.......       44.6             45.4
           Unallocated corporate office items.....          -             (0.1)
                                                    ---------        ---------
             Operating income.....................  $    44.6        $    45.3
                                                    =========        =========

     Operating income for the second quarter of 2005 was $44.6 million
compared with $45.3 million in the second quarter of 2004. Operating income for
the second quarter of 2005 was adversely affected by plant integration costs in
the amount of $2.1 million for the Lima, Ohio production facility acquired in
the first quarter of 2005 (see "Liquidity and Financial Condition"), and higher
raw material and energy costs.

     The specialty chemicals segment recorded operating income of $37.9 million
for the second quarter of 2005 compared with $41.6 million in the second quarter
of 2004. The lower operating income was primarily due to higher raw material and
energy costs.

     The industrial chemicals segment recorded operating income of $0.2 million
in the second quarter of 2005 compared with an operating loss of $1.8 million in
the second quarter of 2004. The segment's improved performance was achieved
despite the $2.1 million one-time integration costs in connection with the Lima,
Ohio production facility referenced above.

     Operating income for the mineral products segment was $6.5 million in the
second quarter of 2005 compared with $5.6 million in the second quarter of 2004.
The improved results were attributable to favorable pricing and higher unit
volumes, partially offset by increased material costs and higher freight and
distribution expenses.

     Interest Expense. Interest expense for the second quarter of 2005 was
$14.2 million compared with $13.5 million in the same period in 2004. The $0.7
million (5%) higher interest expense was attributable to higher average interest
rates ($1.1 million impact), partially offset by lower average borrowings ($0.4
million impact).

     Other Expense, Net. Other expense, net, comprises foreign exchange gains
and losses resulting from the revaluation of foreign currency-denominated
accounts receivable and payable as a result of changes in exchange rates, and
other nonoperating items of expense. Other expense, net, was $5.1 million in the
second quarter of 2005 compared with $2.8 million in the second quarter of

                                       23
<PAGE>

2004. The higher expense in the second quarter of 2005 was due to unfavorable
foreign exchange.

     Income Taxes. In the second quarter of 2005, we recorded a provision for
income taxes of $8.8 million. Our effective tax rate for the second quarter of
2005 was 34.1% compared with an effective tax rate of 34.6% in the second
quarter of 2004.

Business Segment Review

     A discussion of operating results for each of our business segments
follows. We operate our business through three reportable business segments:
specialty chemicals, industrial chemicals and mineral products.

Specialty Chemicals

     Sales in the second quarter of 2005 were $183.1 million compared with
$178.1 million in the same period in 2004. The 3% increase in sales was
primarily due to the favorable impact of the weaker U.S. dollar ($3.3 million),
and, to a lesser extent, favorable pricing.

     Operating income for the specialty chemicals segment was $37.9 million for
the second quarter of 2005 compared with $41.6 million in the second quarter of
2004. The lower operating income was primarily attributable to higher raw
material costs ($6.0 million impact), partially offset by the favorable impact
of the weaker U.S. dollar ($1.6 million).

Industrial Chemicals

     Sales in the second quarter of 2005 were $63.7 million compared with
$49.1 million in the second quarter of 2004. The 30% increase in sales resulted
primarily from favorable pricing ($13.9 million) and, to a lesser extent, the
favorable effect of the weaker U.S. dollar, partially offset by lower unit
volumes.

     The industrial chemicals segment recorded operating income of $0.2 million
in the second quarter of 2005 compared with an operating loss of $1.8 million in
the second quarter of 2004. The improvement in pricing for the industrial
chemicals segment more than offset raw material, manufacturing and energy cost
increases (totaling $10.0 million), as well as higher operating expenses. The
segment's improved performance was achieved despite the $2.1 million one-time
integration costs in connection with the Lima, Ohio production facility which
was acquired in the first quarter of 2005.

Mineral Products

     Sales for the mineral products segment for the second quarter of 2005
were $40.3 million compared with $34.5 million for the second quarter of 2004.
The 17% increase in sales was due to higher unit volumes ($3.2 million), as a
result of industry-wide growth, and favorable pricing and included 10% higher
sales to Building Materials Corporation of America, an affiliate that we refer
to as "BMCA."

     Operating income for the mineral products segment was $6.5 million in the
second quarter of 2005 compared with $5.6 million for the second quarter of
2004. The 16% improvement in operating income was attributable to favorable
pricing ($2.6 million) and the favorable impact of higher unit volumes,


                                       24
<PAGE>

partially offset by increased raw material and manufacturing costs (totaling
$1.8 million) and higher freight and distribution expenses.


RESULTS OF OPERATIONS - FIRST SIX MONTHS 2005 COMPARED WITH
                        FIRST SIX MONTHS 2004

     Overview

     We recorded net income of $36.3 million for the first six months of 2005,
after a non-cash, pre-tax asset impairment charge of $10.5 million (see "Other
Operating Charges" below), compared with net income of $41.2 million in the
first six months of 2004. The decline in net income for the first six months of
2005 was primarily attributable to lower operating income, after including the
$10.5 million charge, and higher other expense, net.

     Net Sales.  Net sales by business segment for the first six months of 2005
and 2004 were:

                                                         Six Months Ended
                                                    --------------------------
                                                      July 3,          July 4,
                                                       2005             2004
                                                    ---------        ---------
                                                             (Millions)
           Specialty chemicals....................  $   369.5        $   364.3
           Industrial chemicals...................      122.4             97.8
           Mineral products.......................       79.9             66.5
                                                    ---------        ---------
             Net sales............................  $   571.8        $   528.6
                                                    =========        =========

     Net sales for the first six months of 2005 were $571.8 million compared
with $528.6 million in the first six months of 2004. The $43.2 million (8%)
increase in sales resulted primarily from higher pricing, higher unit volumes,
and the favorable impact of the weaker U.S. dollar.

     Gross Margin. Our gross margin in the first six months of 2005 was 35.5%
compared with 36.5% in the first six months of 2004. The lower margin was
attributable to higher raw material, energy and manufacturing costs in all
business segments, partially offset by favorable pricing and the favorable
impact of the weaker U.S. dollar. Manufacturing costs in the first six months of
2005 were adversely impacted by plant integration costs for the Lima, Ohio
production facility acquired in the first quarter of 2005 (see further
discussion below).

     Selling, General and Administrative. Selling, general and administrative
expenses increased 2% in the first six months of 2005 to $100.0 million from
$98.3 million in the first six months of 2004; however, as a percent of sales,
these expenses decreased to 17.5% in the first six months of 2005 from 18.6% in
the first six months of 2004. The increase in selling, general and
administrative expenses in the first six months of 2005 related primarily to
higher freight and distribution costs and increased selling expenses as a result
of the higher sales levels.

     Other Operating Charges. Other operating charges of $10.5 million in the
first six months of 2005 represent a non-cash fixed asset impairment charge
related to our program for the restructuring and consolidation of production
capacity in the foods product line within the specialty chemicals business
segment. In March 2005, we entered into a long-term supply contract with an
international company for the purchase of a product in the specialty chemicals
business that we currently manufacture

                                       25
<PAGE>

at our San Diego, California alginates plant. Accordingly, we performed an
impairment review in the first quarter of 2005 and recorded a $10.5 million
non-cash fixed asset impairment charge related to the San Diego facility. The
impairment charge was determined based on a review of anticipated future cash
flows related to this facility compared with the carrying value of the
facility's fixed assets.

     Operating Income. Operating income (loss) by business segment for the first
six months of 2005 and 2004 was:

                                                         Six Months Ended
                                                    --------------------------
                                                      July 3,          July 4,
                                                       2005             2004
                                                    ---------        ---------
                                                            (Millions)
           Specialty chemicals....................  $    72.8        $    87.8
           Industrial chemicals...................        8.0             (1.6)
           Mineral products.......................       11.0              8.1
                                                    ---------        ---------
             Total segment operating income.......       91.8             94.3
           Unallocated corporate office items.....       (0.1)            (0.1)
                                                    ---------        ---------
             Operating income.....................  $    91.7        $    94.2
                                                    =========        =========

     Operating income for the first six months of 2005 was $91.7 million,
after the $10.5 million non-cash asset impairment charge discussed above.
Excluding such charge, operating income increased by 8.5% to $102.2 million from
$94.2 million in the first six months of 2004 (see "Non-GAAP Financial Measures"
below) because of favorable pricing in all business segments. Increased
operating income as a result of the 8% increase in sales for the first six
months of 2005 was partially offset by increased manufacturing costs, including
$2.4 million of integration costs in connection with the acquisition of the
Lima, Ohio production facility in the first quarter of 2005, and higher raw
material and energy costs.

     The specialty chemicals segment recorded operating income of $72.8 million
in the first six months of 2005. Excluding the aforementioned non-cash
impairment charge of $10.5 million, operating income for the segment was $83.3
million compared with $87.8 million in the first six months of 2004. The lower
operating income was due to higher raw material and energy costs.

     The industrial chemicals segment recorded operating income of $8.0 million
in the first six months of 2005 compared with an operating loss of $1.6 million
in the first six months of 2004. The industrial chemicals segment's improved
pricing more than offset material cost increases. The segment's improved
performance was achieved despite the $2.4 million ($0.3 million in the first
quarter and $2.1 million in the second quarter) one-time integration costs in
connection with the Lima, Ohio production facility discussed above.

     Operating income for the mineral products segment was $11.0 million in the
first six months of 2005 compared with $8.1 million in the first six months of
2004. The 36% improvement in operating income was attributable to favorable
pricing and the favorable impact of higher unit volumes, partially offset by
increased material and manufacturing costs and higher freight and distribution
expenses.

     Interest Expense. Interest expense for the first six months of 2005 was
$28.0 million compared with $27.6 million in the same period in 2004. The
slightly higher interest expense was attributable to higher average interest

                                       26
<PAGE>

rates ($0.5 million impact), partially offset by lower average borrowings ($0.1
million impact).

     Other Expense, Net. Other expense, net, comprises foreign exchange gains
and losses resulting from the revaluation of foreign currency-denominated
accounts receivable and payable as a result of changes in exchange rates, and
other nonoperating items of expense. Other expense, net, was $10.0 million in
the first six months of 2005 compared with $4.5 million in the first six months
of 2004. The higher expense in the first six months of 2005 was due to
unfavorable foreign exchange.

     Income Taxes. In the first six months of 2005, we recorded a provision for
income taxes of $18.6 million. Our effective tax rate for the first six months
of 2005 was 33.9% and 34.7% for the first six months of 2004.

Business Segment Review

     A discussion of operating results for each of our business segments
follows. We operate our business through three reportable business segments:
specialty chemicals, industrial chemicals and mineral products. The operating
income for the first six months of 2005 for the specialty chemicals business
segment discussed below is adjusted for the non-GAAP financial measures in the
table below.

   Non-GAAP Financial Measures

      The business segment review below and the discussion of operating
income above contain information regarding non-GAAP financial measures contained
within the meaning of Item 10 of Regulation S-K promulgated by the Securities
and Exchange Commission. As used herein, "GAAP" refers to U.S. generally
accepted accounting principles. We use non-GAAP financial measures to eliminate
the effect of certain other operating gains and charges on reported operating
income. Management believes that these financial measures are useful to
bondholders and financial institutions because such measures exclude
transactions that are unusual due to their nature or infrequency and therefore
allow bondholders and financial institutions to more readily compare our
company's performance from period to period. Management uses this information in
monitoring and evaluating our company's performance and the performance of
individual business segments. The non-GAAP financial measures included herein
have been reconciled to the most directly comparable GAAP financial measure as
is required under Item 10 of Regulation S-K regarding the use of such financial
measures. These non-GAAP financial measures should be considered in addition to,
and not as a substitute, or superior to, operating income or other measures of
financial performance in accordance with U.S. generally accepted accounting
principles.









                                       27
<PAGE>



                                                             Six Months Ended
                                                          ---------------------
                                                            July 3,     July 4,
                                                             2005        2004
                                                          ---------   ---------
                                                                (Millions)
Reconciliation of non-GAAP financial measures:

Operating income per GAAP...............................  $    91.7   $    94.2
Non-GAAP adjustments:
   Add: Other operating charges(1)......................       10.5           -
                                                          ---------   ---------
Operating income as adjusted............................  $   102.2   $    94.2
                                                          =========   =========
Supplemental Business Segment Information:

Operating income (loss):
     Operating Income per GAAP - Specialty Chemicals....  $    72.8   $    87.8
     Non-GAAP adjustments (1)...........................       10.5           -
                                                          ---------   ---------
     Operating Income - Specialty Chemicals as adjusted.  $    83.3   $    87.8
                                                          =========   =========

     Operating Income (Loss) per GAAP - Industrial
       Chemicals........................................  $     8.0   $    (1.6)
     Non-GAAP adjustments...............................          -           -
                                                          ---------   ---------
     Operating Income (Loss) - Industrial Chemicals as
        adjusted........................................  $     8.0   $    (1.6)
                                                          =========   =========

     Operating Income per GAAP - Mineral Products.......  $    11.0   $     8.1
     Non-GAAP adjustments...............................          -           -
                                                          ---------   ---------
     Operating Income - Mineral Products as adjusted....  $    11.0   $     8.1
                                                          =========   =========

     Total segment operating income as adjusted.........  $   102.3   $    94.3
     Unallocated corporate office per GAAP..............       (0.1)       (0.1)
                                                          ---------   ---------
     Operating income as adjusted.......................  $   102.2   $    94.2
                                                          =========   =========


    (1) Non-GAAP adjustments in the first six months of 2005 represent a $10.5
        million non-cash other operating charge for the impairment of fixed
        assets at one of our domestic manufacturing facilities related to a
        program for the restructuring and consolidation of production capacity
        in the specialty chemicals segment. See "Other Operating Charges" above.


Specialty Chemicals

     Sales in the first six months of 2005 were $369.5 million compared with
$364.3 million for the first six months of 2004. The increase in sales was
primarily due to the favorable impact of the weaker U.S. dollar ($6.6 million),
primarily in Europe, and, to a lesser extent, favorable pricing, partially
offset by lower unit volumes ($2.4 million).

     The specialty chemicals segment recorded operating income of $72.8 million
in the first six months of 2005. Excluding the aforementioned non-cash asset
impairment charge of $10.5 million, operating income for the segment was $83.3
million compared with $87.8 million in the first six months of 2004. The lower
operating income was primarily attributable to higher raw material costs ($9.5
million impact), partially offset by the favorable impact of the weaker U.S.
dollar ($3.6 million).

Industrial Chemicals

     Sales in the first six months of 2005 were $122.4 million compared with
$97.8 million in the same period in 2004. The 25% increase in sales resulted
primarily from favorable pricing ($23.6 million) and, to a lesser

                                       28
<PAGE>

extent, the favorable effect of the weaker U.S. dollar ($3.4 million), partially
offset by lower unit volumes.

     The industrial chemicals segment recorded operating income of $8.0 million
in the first six months of 2005 compared with an operating loss of $1.6 million
in the first six months of 2004. The industrial chemicals segment's improved
pricing more than offset higher raw material, energy and manufacturing costs
(totaling $12.2 million). The segment's improved performance was achieved
despite $2.4 of one-time integration costs in connection with the Lima, Ohio
production facility acquired in the first quarter of 2005.

Mineral Products

     Sales for the mineral products segment for the first six months of 2005
were $79.9 million compared with $66.5 million for the first six months of 2004.
The 20% increase in sales was due to higher unit volumes ($8.4 million), as a
result of industry-wide growth, and favorable pricing and included 12% higher
sales to BMCA, an affiliate.

     Operating income for the mineral products segment was $11.0 million in the
first six months of 2005 compared with $8.1 million for the first six months of
2004. The 36% improvement in operating income resulted from favorable pricing
($4.9 million) and the favorable impact of higher unit volumes, partially offset
by increased raw material and manufacturing costs (totaling $3.7 million) and
higher freight and distribution expenses.


LIQUIDITY AND FINANCIAL CONDITION

   Cash Flows and Cash Position

     During the first six months of 2005, our net cash outflow before
financing activities was $106.3 million, including $5.8 million used in
operations and the reinvestment of $100.5 million for capital programs and an
acquisition.

     Operating Activities. Net cash used in operating activities totaled $5.8
million for the first six months of 2005, principally related to a cash
investment of $88.6 million in additional working capital, including a $32.5
million increase in receivables as a result of higher sales, a $26.2 million
increase in inventories to support our sales growth and a $28.8 million net
decrease in payables and accrued liabilities, mainly due to payments of accrued
interest and income taxes.

     Investing Activities. Net cash used in investing activities in the first
six months of 2005 totaled $100.5 million for capital expenditures and an
acquisition. Capital expenditures in the first six months of 2005 included $33.6
million for the purchase of equipment at our Freetown, Massachusetts facility.
We entered into an operating lease in 1998 for an equipment sale-leaseback
transaction related to this equipment. The lease had an initial term of four
years and, at our option, up to three one-year renewal periods. The lease
provided for a substantial guaranteed payment by us, adjusted at the end of each
renewal period, and included purchase and return options at fair market values
determined at the inception of the lease. We had the right to exercise a
purchase option with respect to the leased equipment, or the equipment could be
returned to the lessor and sold to a third party. We exercised the purchase
option in the first quarter of 2005 for a purchase price of $33.6 million.


                                       29
<PAGE>

     Our total capital expenditures for the year 2005 are expected to be
approximately $110 million.

     In March 2005, we acquired a 1,4-butanediol ("BDO") production facility in
Lima, Ohio, and related working capital. BDO is a key building block for many of
the core specialty chemicals that we market for pharmaceutical, personal care,
food, beverage, coatings, oil field and other market applications. The
preliminary purchase price of the acquisition has been allocated to the
estimated fair value of the assets acquired pending the determination of any
additional contingent consideration. This acquisition is not expected to be
material to our results of operations in 2005.

     Financing Activities. Net cash provided by financing activities in the
first six months of 2005 totaled $91.7 million, principally attributable to a
$90.0 million capital contribution from our parent company. Financing activities
in the first six months of 2005 also included $2.7 million in revolving credit
borrowings under our senior credit facilities, offset by $1.0 million of
repayments of long-term debt.

     As a result of the foregoing factors, cash and cash equivalents decreased
by $15.8 million during the first six months of 2005 to $17.1 million.

   Current Maturities of Long-Term Debt

     As of July 3, 2005, our current maturities of long-term debt, scheduled to
be repaid during the twelve-month period ended June 2006, totaled $2.9 million,
including $2.5 million related to the term loan under our senior credit
facilities.

   Contingencies

     See Note 11 to consolidated financial statements for information regarding
contingencies.

   Contractual Obligations

     We have an acetylene supply contract for our requirements of acetylene
delivery via pipeline to our Calvert City, Kentucky facility. The current term
of this contract expires December 31, 2009 and allows us, at our sole option, to
extend the agreement for two additional five-year terms. We are required by the
contract to pay a monthly non-cancelable facility fee. Pricing under the
contract is on a fixed basis with escalators related to changes in the Producer
Price Index.

     In 2004, we entered into a long-term requirements contract for acetylene at
our Texas City, Texas facility. Under this contract, we are obligated to
purchase specified quantities of acetylene through the end of 2013. Pricing
under this contract is on a fixed basis with escalators related to changes in
actual costs and changes in the Producer Price Index.

     The annual unconditional purchase obligation related to the long-term
acetylene supply contract at the Texas City plant, together with the
non-cancelable facility fee associated with the acetylene contract for the
Calvert City plant, is $5.1 million.

                                       30
<PAGE>

     In March 2005, we entered into a long-term contract with an
international company for us to purchase 100% of our global requirements of a
product in the specialty chemicals business that we currently manufacture.
Subject to limited conditions and commencing no later than April 2006, for a
period of five years our annual purchase obligation related to this long-term
supply contract will be approximately $6.5 million. In the event that we do not
meet the annual purchase obligation, we must pay a penalty equal to 30% of the
price of the volume shortfall.

     As previously discussed, in March 2005, we acquired a BDO production
facility in Lima, Ohio. As part of this acquisition, we assumed responsibility
for a long-term supply agreement for the purchase of 100% of our hydrogen gas
requirements for the Lima facility from a supplier located within the same
complex as our BDO production facility. The supply agreement was originally
entered into in 1999 and has a term of 15 years beginning in March 2000. We are
required to pay a minimum monthly charge (currently $3.1 million on an
annualized basis), which increases at the rate of 3.5% per year for the
remainder of the term of the agreement.

   Recent Accounting Pronouncements

     In November 2004, the Financial Accounting Standards Board, which we refer
to as "FASB," issued Statement of Financial Accounting Standards, which we refer
to as SFAS, No. 151, "Inventory Costs," an amendment of Accounting Research
Bulletin, which we refer to as "ARB," No. 43, Chapter 4, which discussed the
general principles applicable to the pricing of inventory. SFAS No. 151 amends
ARB No. 43, Chapter 4, to clarify that abnormal amounts of idle facility
expense, freight, handling costs, and spoilage should be recognized as
current-period charges. In addition, SFAS No. 151 requires that allocation of
fixed production overheads to the costs of conversion be based on the normal
capacity of the production facilities. SFAS No. 151 will be effective for
inventory costs incurred during fiscal years beginning after June 15, 2005. We
do not expect the adoption of SFAS No. 151 to have a material effect on our
consolidated financial statements.

     In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary
Assets," an amendment of Accounting Principles Board, which we refer to as
"APB," Opinion No. 29. SFAS No. 153 eliminates the exception from fair value
measurement for nonmonetary exchanges of similar productive assets and replaces
it with an exception for exchanges that do not have commercial substance. A
nonmonetary exchange has commercial substance if the entity's future cash flows
are expected to significantly change as a result of the exchange. SFAS No. 153
will be effective for nonmonetary asset exchanges occurring in fiscal reporting
periods beginning after June 15, 2005. We do not expect the adoption of SFAS No.
153 to have an immediate effect on our consolidated financial statements.

     In December 2004, the FASB issued a revised SFAS No. 123, which we refer to
as "SFAS No. 123R," "Share-Based Payment." SFAS No. 123R requires that the cost
resulting from all share-based payment transactions be recognized in the
financial statements. SFAS No. 123R establishes fair value as the measurement
objective in accounting for share-based payment arrangements and requires all
entities to apply a fair-value-based measurement method in accounting for
share-based payment transactions with employees. In February 2003, our indirect
parent company, International Specialty Products Inc., which we refer to as
"ISP," completed a going private transaction. As a result, stock-based
compensation plans were

                                       31
<PAGE>

terminated and payments were made in accordance with the terms of the merger
agreement. In addition, we currently account for incentive units granted to our
eligible employees pursuant to ISP's 2000 Long-Term Incentive Plan and 2003
Executive Long-Term Incentive Plan under the accounting prescribed by FASB
Interpretation No., which we refer to as "FIN" 28, "Accounting for Stock
Appreciation Rights and Other Variable Stock Option and Award Plans." FIN 28
requires an entity to measure compensation as the amount by which the Book Value
(as defined in the plans) of the incentive units covered by the grant exceeds
the option price or value specified of such incentive units between the date of
grant and the measurement date, resulting in a change in the measure of
compensation for the right or award. Since compensation expense related to such
incentive units is currently included in our actual Consolidated Statements of
Operations, we do not expect SFAS No. 123R to have an impact on our consolidated
financial statements.

     In December 2004, the FASB issued FASB Staff Position, which we refer to as
"FSP," Nos. FAS 109-1 and FAS 109-2, each as a result of the passage in October
2004 of the American Jobs Creation Act of 2004, which we refer to as the "Jobs
Act." FSP No. FAS 109-1 relates to a provision in the Jobs Act that provides a
tax deduction of up to 9 percent (when fully phased-in) on qualified production
activities. The FASB indicated in FSP No. FAS 109-1 that this deduction should
be accounted for as a special deduction in accordance with SFAS No. 109,
"Accounting for Income Taxes," rather than as a tax rate reduction. This FSP is
effective upon issuance. We do not expect the adoption of this FSP to have a
material effect on our 2005 consolidated financial statements.

     FSP No. FAS 109-2 relates to a provision in the Jobs Act that introduces a
special one-time dividends received deduction on the repatriation of certain
foreign earnings to a U.S. taxpayer, provided certain criteria are met. FSP No.
FAS 109-2 was effective upon issuance. This FSP will not have an impact on our
consolidated financial statements.

     In March 2005, the FASB issued FIN 47, "Accounting for Conditional Asset
Retirement Obligations," an interpretation of SFAS No. 143, "Accounting for
Asset Retirement Obligations." SFAS No. 143 states that an entity shall
recognize the fair value of a liability for an asset retirement obligation
("ARO") in the period in which it is incurred if a reasonable estimate of fair
value can be made. The term "conditional asset retirement obligation" refers to
a legal obligation to perform an asset retirement activity in which the timing
and/or method of settlement are conditional on a future event that may or may
not be within the control of the entity. FIN 47 states that if an entity has
sufficient information to reasonably estimate the fair value of an ARO, it must
recognize a liability at the time the liability is incurred. An entity would
have sufficient information to apply an expected present value and therefore an
ARO would be reasonably estimable if either of the following conditions exist:
(a) the settlement date and method of settlement for the ARO have been specified
by others, such as by law, regulation or contract or (b) the information is
available to reasonably estimate the settlement date or the range of potential
settlement dates, the method of settlement, and the probabilities associated
with the potential settlement dates and methods of settlements. FIN 47 will be
effective for the Company as of December 31, 2005. We are currently reviewing
our AROs to determine the potential impact of FIN 47 on our consolidated
financial statements, and, at this time, we do not believe that FIN 47 will have
a material impact on our consolidated financial statements.

                                       32
<PAGE>

     In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections." SFAS No. 154 eliminates the requirement in APB Opinion No. 20,
"Accounting Changes," to include the cumulative effect of changes in accounting
principles in the Consolidated Statement of Operations in the period of change.
Instead, SFAS No. 154 requires that changes in accounting principles be
retrospectively applied, whereby the new accounting principle is applied to
prior accounting periods as if that principle had always been used. SFAS No. 154
also redefines "restatement" as the revision of previously issued financial
statements to reflect the correction of an error. SFAS No. 154 is effective for
accounting changes and corrections of errors made in fiscal years beginning
after December 15, 2005, although early adoption is permitted for accounting
changes and correction of errors made after the date SFAS No. 154 was issued.
SFAS No. 154 does not change the transition provisions of any existing
accounting pronouncements.


                                     * * *

Forward-looking Statements

     This quarterly report on Form 10-Q contains both historical and
forward-looking statements. All statements other than statements of historical
fact are, or may be deemed to be, forward-looking statements within the meaning
of section 27A of the Securities Act of 1933 and section 21E of the Securities
Exchange Act of 1934. These forward-looking statements are only predictions and
generally can be identified by use of statements that include phrases such as
"believe", "expect", "anticipate", "intend", "plan", "foresee" or other words or
phrases of similar import. Similarly, statements that describe our objectives,
plans or goals also are forward-looking statements. Our operations are subject
to certain risks and uncertainties that could cause actual results to differ
materially from those contemplated by the relevant forward-looking statement.
The forward-looking statements included herein are made only as of the date of
this quarterly report on Form 10-Q and we undertake no obligation to publicly
update such forward-looking statements to reflect subsequent events or
circumstances. No assurances can be given that projected results or events will
be achieved.
















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<PAGE>


               ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
                              ABOUT MARKET RISK

     Reference is made to Management's Discussion and Analysis of Financial
Condition and Results of Operations in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2004, for a discussion of "Market-Sensitive
Instruments and Risk Management." At December 31, 2004 and July 3, 2005, there
were no equity-related financial instruments employed by us to reduce market
risk.


                        ITEM 4. CONTROLS AND PROCEDURES

     Disclosure Controls and Procedures: Our management, with the
participation of the Chief Executive Officer and Chief Financial Officer,
conducted an evaluation of the effectiveness of our disclosure controls and
procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this report. Based on this evaluation, the Chief
Executive Officer and Chief Financial Officer have each concluded that, as of
the end of such period, our disclosure controls and procedures are effective in
recording, processing, summarizing and reporting, on a timely basis, information
required to be disclosed by us in the reports filed, furnished or submitted
under the Exchange Act.

     Internal Control Over Financial Reporting: There were no significant
changes in our internal control over financial reporting identified in
management's evaluation during the fiscal quarter to which this report relates
that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.
















                                       34
<PAGE>


                                    PART II
                               OTHER INFORMATION

ITEM 5.  OTHER INFORMATION

     During the second quarter of 2005, the Company amended its management
agreement (the "Management Agreement"), effective January 1, 2005, whereby the
Company, through a subsidiary, provides certain general management services to
Building Materials Corporation of America ("BMCA"), an affiliate, ISP,
International Specialty Holdings Inc., the Company's parent company, ISP
Investco LLC, and ISP Synthetic Elastomers LP. The purpose of the amendment was
to adjust the management fees payable under the Management Agreement. The
aggregate charges for providing such services are expected to be approximately
$24.9 million during 2005. A breakout of charges to each party is set forth in
the amendment to the Management Agreement, which is filed as Exhibit 10.1 to
this report and incorporated by reference herein.

     In addition, during the second quarter of 2005, a subsidiary of the Company
entered into a management services agreement with Heyman Properties, LLC and
Heyman Investment Associates Limited Partnership (collectively, the "Heyman
Entities"), effective as of January 1, 2005. The term of the agreement is from
January 1, 2005, through December 31, 2005, and may be renewed for additional
one-year terms. Under the agreement, the Company will provide certain general
management services, and the Heyman Entities will provide certain advisory
services. The Company will receive a net amount of approximately $0.3 million
related to these services in 2005. A more detailed explanation of the charges is
set forth in the management services agreement, which is filed as Exhibit 10.2
to this report and incorporated by reference herein.











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<PAGE>


ITEM 6.  EXHIBITS

     Exhibits:

     Exhibit Number
     --------------

     10.1  Amendment No. 7 to the Amended and Restated Management Agreement
           dated as of January 1, 2005, by and among G-I Holdings Inc., Merick
           Inc., International Specialty Products Inc., International Specialty
           Holdings Inc., ISP Investco LLC, ISP Synthetic Elastomers LP, GAF
           Broadcasting Company, Inc., Building Materials Corporation of America
           and ISP Management Company, Inc., as assignee of ISP Chemco Inc.
           (incorporated by reference to Exhibit 10.1 to International Specialty
           Holdings Inc.'s Form 10-Q for the quarterly period ended July 3,
           2005).

     10.2  Management Services Agreement, dated as of January 1, 2005, by and
           among ISP Management Company, Inc., Heyman Properties, LLC,
           and Heyman Investment Associates Limited Partnership
           (incorporated by reference to Exhibit 10.2 to International
           Specialty Holdings Inc.'s Form 10-Q for the quarterly period
           ended July 3, 2005).

     10.3  Form of International Specialty Products Inc. 2000 Long Term
           Incentive Plan Incentive Unit Grant Agreement (incorporated by
           reference to Exhibit 10.3 to International Specialty Holdings
           Inc.'s Form 10-Q for the quarterly period ended July 3, 2005).

     10.4  Form of International Specialty Products Inc. 2003 Executive Long
           Term Incentive Plan Incentive Unit Grant Agreement
           (incorporated by reference to Exhibit 10.4 to International
           Specialty Holdings Inc.'s Form 10-Q for the quarterly period
           ended July 3, 2005).

     31.1  Rule 13a-14(a)/Rule 15d-14(a) Certification of the Chief Executive
           Officer.

     31.2  Rule 13a-14(a)/Rule 15d-14(a) Certification of the Chief Financial
           Officer.

     32.1  Certification of the Chief Executive Officer and Chief Financial
           Officer pursuant to 18 U.S.C. Section 1350.




                                       36
<PAGE>


                                  SIGNATURES


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

                               ISP CHEMCO INC.
                               ISP CHEMICALS INC.
                               ISP MINERALS INC.
                               ISP TECHNOLOGIES INC.





DATE:  August 17, 2005             BY: /s/ Salvatore J. Guccione
       ---------------                 -------------------------

                                       Salvatore J. Guccione
                                       Senior Vice President and
                                         Chief Financial Officer
                                       (Principal Financial Officer)


DATE:  August 17, 2005             BY: /s/Kenneth M. McHugh
       ---------------                 --------------------

                                       Kenneth M. McHugh
                                       Vice President and Controller
                                       (Principal Accounting Officer)












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