UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION Washington, DC20549

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FORM10-Q

(Mark One)

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|   | **QUARTERLY REPORT PURSUANT TO SECTION 13 OR15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |

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|   | For thequarterly period ended September 30, 2004 |

or

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|   | **TRANSITION REPORT PURSUANT TO SECTION 13 OR15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** |

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|   | For thetransition period from              to             . |

Commission File No.333-115560-15

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NALCO HOLDINGSLLC

(Exact name of registrant asspecified in its charter)

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|----------------------------------------------------------------------------|--|-------------------------------------------------------|--|--|--|--|
| **Delaware**(State or other jurisdiction of Incorporation or Organization) |  | **73-1683500** (I.R.S. Employer IdentificationNumber) |
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1601 West Diehl Road Naperville, IL60563-1198 (630) 305-1000(Address, IncludingZip Code, and Telephone Number, Including Area Code, ofRegistrant's Principal Executive Offices)

Indicate by check mark whether the registrant: (1) has filedall reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or forsuch shorter period that the registrant was required to file suchreports), and (2) has been subject to such filing requirements for thepast 90 days. Yes       No   

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

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QUARTERLY REPORT ON FORM10-Q NALCO HOLDINGS LLC Quarter Ended September 30, 2004

TABLE OF CONTENTS

|                                  |  |                                                                                                                                                          |  |        |    |        |  |  |  |  |
|----------------------------------|--|----------------------------------------------------------------------------------------------------------------------------------------------------------|--|--------|----|--------|--|--|--|--|
| **Part I. FinancialInformation** |  |
| Item1.                           |  | FinancialStatements (Unaudited)                                                                                                                          |  |
|                             |  | CondensedConsolidated Balance Sheets –     September 30, 2004 andDecember 31, 2003                                             |  |   | 2  |   |
|                             |  | CondensedConsolidated and Combined Statements of Operations –    Three months and nine months ended September 30, 2004 and2003 |  |   | 3  |   |
|                             |  | Condensed Consolidated andCombined Statements of Cash Flows –     Nine months endedSeptember 30, 2004 and 2003                 |  |   | 4  |   |
|                             |  | Notes to Condensed Consolidated and CombinedFinancial Statements –     September 30,2004                                       |  |   | 5  |   |
| Item2.       |  | Management's Discussion and Analysis ofFinancial Condition and Results of    Operations                                              |  |   | 26 |   |
| Item 3.                          |  | Quantitative andQualitative Disclosures About Market Risk                                                                                                |  |   | 37 |   |
| Item 4.                          |  | Controls andProcedures                                                                                                                                   |  |   | 37 |   |
| **Part II. Other Information**   |  |
| Item 1.                          |  | LegalProceedings                                                                                                                                         |  |   | 39 |   |
| Item6.                           |  | Exhibits                                                                                                                                                 |  |   | 40 |   |
|                                  |

1

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PART I.    FINANCIALINFORMATION

Item 1.    Financial Statements(Unaudited)

Nalco Holdings LLC andSubsidiaries

Condensed Consolidated BalanceSheets(Dollars inMillions)

|                                                                      |  |                             |         |                 |  |        |         |        |  |  |
|----------------------------------------------------------------------|--|-----------------------------|---------|-----------------|--|--------|---------|--------|--|--|
|                                                                 |  | (Unaudited)September30,2004 |         | December31,2003 |
| **Assets**                                                           |  |                        |    |            |  |   |    |   |
| Currentassets:                                                       |  |                        |    |            |  |   |    |   |
| Cash and cashequivalents                                             |  | $                           | 63.1    |            |  | $      | 100.0   |   |
| Accountsreceivable, less allowances of $23.9 in 2004and $21.0 in2003 |  |                        | 523.2   |            |  |   | 482.9   |   |
| Inventories:                                                         |  |                        |    |            |  |   |    |   |
| Finishedproducts                                                     |  |                        | 226.0   |            |  |   | 233.6   |   |
| Materialsand work inprocess                                          |  |                        | 59.9    |            |  |   | 61.5    |   |
|                                                                 |  |                        | 285.9   |            |  |   | 295.1   |   |
| Prepaidexpenses, taxes and other currentassets                       |  |                        | 60.6    |            |  |   | 97.6    |   |
| Totalcurrentassets                                                   |  |                        | 932.8   |            |  |   | 975.6   |   |
|                                                                 |  |                        |    |            |  |   |    |   |
| Property,plant, and equipment,net                                    |  |                        | 815.8   |            |  |   | 865.6   |   |
| Intangibleassets:                                                    |  |                        |    |            |  |   |    |   |
| Goodwill                                                             |  |                        | 2,359.1 |            |  |   | 2,500.1 |   |
| Otherintangibles,net                                                 |  |                        | 1,333.9 |            |  |   | 1,408.9 |   |
| Otherassets                                                          |  |                        | 385.4   |            |  |   | 413.6   |   |
| Totalassets                                                          |  | $                           | 5,827.0 |            |  | $      | 6,163.8 |   |
|                                                                 |  |                        |    |            |  |   |    |   |
| **Liabilitiesand unitholder'sequity**                                |  |                        |    |            |  |   |    |   |
| Currentliabilities:                                                  |  |                        |    |            |  |   |    |   |
| Accountspayable                                                      |  | $                           | 223.3   |            |  | $      | 155.9   |   |
| Short-termdebt                                                       |  |                        | 13.7    |            |  |   | 51.9    |   |
| Other currentliabilities                                             |  |                        | 321.7   |            |  |   | 321.0   |   |
| Totalcurrentliabilities                                              |  |                        | 558.7   |            |  |   | 528.8   |   |
|                                                                 |  |                        |    |            |  |   |    |   |
| Otherliabilities:                                                    |  |                        |    |            |  |   |    |   |
| Long-termdebt                                                        |  |                        | 3,025.7 |            |  |   | 3,262.8 |   |
| Deferredincometaxes                                                  |  |                        | 560.8   |            |  |   | 624.0   |   |
| Accruedpensionbenefits                                               |  |                        | 395.6   |            |  |   | 374.1   |   |
| Otherliabilities                                                     |  |                        | 305.8   |            |  |   | 293.5   |   |
|                                                                 |  |                        |    |            |  |   |    |   |
| Minorityinterest                                                     |  |                        | 12.9    |            |  |   | 11.6    |   |
| Unitholder'sequity                                                   |  |                        | 967.5   |            |  |   | 1,069.0 |   |
| Totalliabilities and unitholder'sequity                              |  | $                           | 5,827.0 |            |  | $      | 6,163.8 |   |
|                                                                      |

Seeaccompanying notes to condensed consolidated and combined financialstatements.

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Nalco Holdings LLC andSubsidiaries

Condensed Consolidated and CombinedStatements of Operations(Unaudited)(Dollars inMillions)

|                                              |  |                                      |         |                                      |  |                                     |         |                                    |  |        |          |         |  |        |          |         |  |  |
|----------------------------------------------|--|--------------------------------------|---------|--------------------------------------|--|-------------------------------------|---------|------------------------------------|--|--------|----------|---------|--|--------|----------|---------|--|--|
|                                         |  | Successor                            |         | Predecessor                          |  | Successor                           |         | Predecessor                        |
|                                         |  | ThreeMonths ended September 30, 2004 |         | Three Monthsended September 30, 2003 |  | Nine Months endedSeptember 30, 2004 |         | Nine Months ended September30,2003 |
|                                         |  |                                 |    |                                 |  |                                |    |                               |  |   |     |    |  |   |     |    |
| Netsales                                     |  | $                                    | 774.2   |                                 |  | $                                   | 711.4   |                               |  | $      | 2,227.9  |    |  | $      | 2,064.1  |    |
| Operatingcosts andexpenses:                  |  |                                 |    |                                 |  |                                |    |                               |  |   |     |    |  |   |     |    |
| Costof productsold                           |  |                                 | (394.7  | )                               |  |                                | (337.9  | )                             |  |   | (1,128.4 | )  |  |   | (992.8   | )  |
| Selling,administrative, and researchexpenses |  |                                 | (261.7  | )                               |  |                                | (261.5  | )                             |  |   | (789.5   | )  |  |   | (792.6   | )  |
| Impairmentofgoodwill                         |  |                                 | — |                                 |  |                                | — |                               |  |   | —  |    |  |   | (244.4   | )  |
| Amortizationof intangibleassets              |  |                                 | (23.9   | )                               |  |                                | (20.5   | )                             |  |   | (73.0    | )  |  |   | (61.8    | )  |
| In-processresearch anddevelopment            |  |                                 | — |                                 |  |                                | — |                               |  |   | (122.3   | )  |  |   | —  |    |
| Businessoptimizationexpenses                 |  |                                 | — |                                 |  |                                | (5.5    | )                             |  |   | —  |    |  |   | (15.2    | )  |
|                                         |  |                                 | (680.3  | )                               |  |                                | (625.4  | )                             |  |   | (2,113.2 | )  |  |   | (2,106.8 | )  |
|                                         |  |                                 |    |                                 |  |                                |    |                               |  |   |     |    |  |   |     |    |
| Operatingearnings(loss)                      |  |                                 | 93.9    |                                 |  |                                | 86.0    |                               |  |   | 114.7    |    |  |   | (42.7    | )  |
|                                         |  |                                 |    |                                 |  |                                |    |                               |  |   |     |    |  |   |     |    |
| Otherincome (expense),net                    |  |                                 | (1.2    | )                               |  |                                | (12.8   | )                             |  |   | (6.5     | )  |  |   | (13.0    | )  |
| Interestincome                               |  |                                 | 2.3     |                                 |  |                                | 1.1     |                               |  |   | 7.7      |    |  |   | 5.4      |    |
| Interestexpense                              |  |                                 | (53.7   | )                               |  |                                | (9.7    | )                             |  |   | (159.7   | )  |  |   | (29.2    | )  |
|                                         |  |                                 |    |                                 |  |                                |    |                               |  |   |     |    |  |   |     |    |
| Earnings(loss) before incometaxes            |  |                                 | 41.3    |                                 |  |                                | 64.6    |                               |  |   | (43.8    | )  |  |   | (79.5    | )  |
|                                         |  |                                 |    |                                 |  |                                |    |                               |  |   |     |    |  |   |     |    |
| Incometaxprovision                           |  |                                 | (27.2   | )                               |  |                                | (29.5   | )                             |  |   | (46.8    | )  |  |   | (70.1    | )  |
|                                         |  |                                 |    |                                 |  |                                |    |                               |  |   |     |    |  |   |     |    |
| Minorityinterests                            |  |                                 | (1.7    | )                               |  |                                | (1.4    | )                             |  |   | (3.6     | )  |  |   | (4.4     | )  |
| Netincome(loss)                              |  | $                                    | 12.4    |                                 |  | $                                   | 33.7    |                               |  | $      | (94.2    | )  |  | $      | (154.0   | )  |
|                                              |

Seeaccompanying notes to condensed consolidated and combined financialstatements.

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Nalco Holdings LLC andSubsidiaries

Condensed Consolidated and CombinedStatements of Cash Flows(Unaudited)(Dollars inMillions)

|                                                                               |  |                                   |         |                                  |  |        |         |         |  |  |
|-------------------------------------------------------------------------------|--|-----------------------------------|---------|----------------------------------|--|--------|---------|---------|--|--|
|                                                                          |  | Successor                         |         | Predecessor                      |
|                                                                          |  | NineMonthsendedSeptember 30, 2004 |         | NineMonthsendedSeptember 30,2003 |
| **Operatingactivities**                                                       |  |                              |    |                             |  |   |    |    |
| Netloss                                                                       |  | $                                 | (94.2   | )                           |  | $      | (154.0  | )  |
| Adjustmentsto reconcile net loss to net cash provided by operatingactivities: |  |                              |    |                             |  |   |    |    |
| Depreciation                                                                  |  |                              | 80.7    |                             |  |   | 91.6    |    |
| Amortization                                                                  |  |                              | 73.0    |                             |  |   | 61.8    |    |
| Impairmentofgoodwill                                                          |  |                              | — |                             |  |   | 244.4   |    |
| In-processresearch anddevelopment                                             |  |                              | 122.3   |                             |  |   | — |    |
| Amortizationof deferred financingcosts                                        |  |                              | 8.4     |                             |  |   | — |    |
| Other,net                                                                     |  |                              | 21.1    |                             |  |   | 49.7    |    |
| Changes inoperating assets andliabilities                                     |  |                              | 44.9    |                             |  |   | (30.8   | )  |
| Netcash provided by operatingactivities                                       |  |                              | 256.2   |                             |  |   | 262.7   |    |
|                                                                          |  |                              |    |                             |  |   |    |    |
| **Investingactivities**                                                       |  |                              |    |                             |  |   |    |    |
| Purchase priceadjustment on acquisition of Ondeo NalcoGroup                   |  |                              | 25.3    |                             |  |   | — |    |
| Additions toproperty, plant, and equipment,net                                |  |                              | (57.7   | )                           |  |   | (66.9   | )  |
| Businesspurchases/sales,net                                                   |  |                              | — |                             |  |   | (25.6   | )  |
| Other investingactivities                                                     |  |                              | (5.1    | )                           |  |   | (35.4   | )  |
| Netcash used for investingactivities                                          |  |                              | (37.5   | )                           |  |   | (127.9  | )  |
|                                                                          |  |                              |    |                             |  |   |    |    |
| **Financingactivities**                                                       |  |                              |    |                             |  |   |    |    |
| Cashdividends                                                                 |  |                              | — |                             |  |   | (29.0   | )  |
| Changes inshort-term debt,net                                                 |  |                              | (38.1   | )                           |  |   | (100.6  | )  |
| Proceeds fromlong-term debt                                                   |  |                              | 93.0    |                             |  |   | 0.6     |    |
| Repaymentsof long-termdebt                                                    |  |                              | (318.6  | )                           |  |   | (6.8    | )  |
| Capitalcontributions                                                          |  |                              | 11.0    |                             |  |   | 31.6    |    |
| Other                                                                         |  |                              | (0.7    | )                           |  |   | (2.6    | )  |
| Netcash used for financingactivities                                          |  |                              | (253.4  | )                           |  |   | (106.8  | )  |
| Effect ofexchange rate changes on cash and cashequivalents                    |  |                              | (2.2    | )                           |  |   | 10.7    |    |
| Increase(decrease) in cash and cashequivalents                                |  |                              | (36.9   | )                           |  |   | 38.7    |    |
| Cash andcash equivalents at beginning ofperiod                                |  |                              | 100.0   |                             |  |   | 120.5   |    |
| Cashand cash equivalents at end ofperiod                                      |  | $                                 | 63.1    |                             |  | $      | 159.2   |    |
|                                                                               |

Seeaccompanying notes to condensed consolidated and combined financialstatements

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Nalco HoldingsLLC and Subsidiaries

Notes to Condensed Consolidatedand Combined Financial Statements(Unaudited)(Dollars in Millions)

September 30, 2004

1.    Description of Business and Change in Ownership

Description of Business

The Company is engagedin the worldwide manufacture and sale of highly specialized servicechemical programs. This includes production and service related to thesale and application of chemicals and technology used in watertreatment, pollution control, energy conservation, oil production andrefining, steelmaking, papermaking, mining, and other industrialprocesses.

Change in Ownership

On November4, 2003, Nalco Holdings LLC (the Company or Successor), a newly-formedentity controlled by affiliates of The Blackstone Group, L.P., ApolloManagement, L.P., and The Goldman Sachs Group, Inc. (collectively, theSponsors), pursuant to a Stock Purchase Agreement (as amended, theStock Purchase Agreement) with Suez S.A. (Suez or Seller) and certainof its affiliates, acquired the net assets of Ondeo Nalco Group (thePredecessor and as defined in Note 2 below) for $4,127.1 millionincluding direct costs of the acquisition of $125.6 million, excludingassumed debt of $30.2 million, and subject to certain closing andpost-closing adjustments (the Acquisition).

The Company wascapitalized by equity investments totaling $991.9 million from theSponsors and $10.0 million from Dr. William H. Joyce, the Chairman andChief Executive Officer of Nalco Holdings LLC. The equity investmentswere made to Nalco Investment Holdings LLC which, in turn, contributed$1,001.9 million to Nalco Holdings LLC and was its parent company as ofDecember 31, 2003. On January 14, 2004, Nalco Investment Holdings LLCcontributed its 100% interest in Nalco Holdings LLC in exchangefor a 100% interest in a newly formed entity, Nalco FinanceHoldings LLC. As of that date, Nalco Finance Holdings LLC became theparent company of Nalco Holdings LLC. Subsequent to that date, theSponsors and Dr. Joyce engaged in a series of transactions thatultimately resulted in a newly formed entity, Nalco LLC, becoming thedirect parent company of another newly formed entity, Nalco InvestmentHoldings II Corp., which, in turn, became the direct parent company ofNalco Investment Holdings LLC. Nalco Investment Holdings II Corp. hassince been renamed Nalco Holding Company.

Funding for theAcquisition included the equity investments and the issuance of seniornotes and senior subordinated notes (the Notes) in a private offering,and new revolving credit and term loan facilities by the Company,through its 100% owned subsidiary, Nalco Company.

TheStock Purchase Agreement provides for certain adjustments of thepurchase price, including adjustments based on the closing workingcapital and indebtedness (as both are defined in the Stock PurchaseAgreement) of the Predecessor at the date of the Acquisition. On March25, 2004, the Company and Suez agreed to a $25.6 million workingcapital adjustment payable to the Company plus interest. Thisadjustment was not reflected in the consolidated financial statementsas of December 31, 2003. The Company recorded the purchase priceadjustment in 2004 by decreasing goodwill.

2.    Basis of Presentation

Theseconsolidated and combined financial statements should be read inconjunction with the consolidated financial statements of the Successoras of December 31, 2003 and for the period from November 4, 2003 toDecember 31, 2003, the combined financial statements of the Predecessoras of December 31, 2002 and 2001 and for each of the two years in theperiod ended December 31, 2002 and the combined financial statements ofthe Predecessor for the period from January 1, 2003 to November 3,2003.

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2.    Basis of Presentation  (Continued)

Predecessor – The accompanyingcombined financial statements of the Predecessor prior to theAcquisition include the consolidated financial statements of OndeoNalco Company and subsidiaries (ONC) and the combined financialstatements of certain subsidiaries of Nalco International SAS (NIS)plus Calgon Europe Limited (UK), owned by Degremont (a former relatedparty). The combined financial statements of NIS subsidiaries are acombination of the consolidated financial statements of Ondeo NalcoFrance, the consolidated financial statements of Aquazur Ltd., and theconsolidated financial statements of Nalco Dutch Holdings B.V., OndeoNalco Belgium NV/SA, Wyss Wassertechnik AG, Ondeo Nalco (Shanghai)Trading Co., Ltd., and Nalco Portuguesa (Quimica Industrial) Ltd. OndeoIndustrial Solutions North America, a subsidiary of ONC, has beenexcluded from the Predecessor, as it was not acquired by theCompany.

Successor – The accompanying consolidatedfinancial statements include the accounts of Nalco Holdings LLC andsubsidiaries (collectively, the Company) subsequent to theAcquisition.

The accompanying unaudited consolidated financialstatements of the Successor and unaudited combined financial statementsof the Predecessor have been prepared in accordance with generallyaccepted accounting principles for interim financial information.Accordingly, they do not include all of the information and footnotesrequired by accounting principles generally accepted in the UnitedStates for complete financial statements. Management believes thesefinancial statements include all normal recurring adjustmentsconsidered necessary for a fair presentation of the financial positionand results of operations of the Company. Operating results for thethree months and nine months ended September 30, 2004 are notnecessarily indicative of results that may be expected for the yearended December 31, 2004.

Certain reclassifications have beenmade to the prior year data to conform to the current year presentationwhich had no effect on net income reported for any period.

Theconsolidated financial statements of the Successor as of and for thethree months and nine months ended September 30, 2004 reflect theAcquisition under the purchase method of accounting, in accordance withthe Financial Accounting Standards Board("FASB") Statement of Financial AccountingStandards ("SFAS") No.  141,Business Combinations.

The following unaudited pro formafinancial data summarizes the results of operations for the threemonths and nine months ended September 30, 2003 as if the Acquisitionhad occurred as of the beginning of that period.

Pro formaadjustments include adjustments for (1) purchase accounting, including,(i) the elimination of inventory write-up recorded as a result of theAcquisition, (ii) adjustments to depreciation and amortization toreflect the fair value of property, plant and equipment and identifiedintangible assets (with finite lives), (iii) elimination of the pensionand other postretirement benefit amortization of unrecognized actuariallosses, prior service costs and transition obligations and assetslosses, and (2) adjustments for items directly related to thetransaction, including (i) rent expense that we would have incurred hadthe sublease of our Naperville, Illinois headquarters and researchfacility been in place, (ii) elimination of management fees that Suezand its affiliates charged to the Company for general corporateoverhead and of charges to Suez and its affiliates for tax planning andcompliance and treasury administration provided by the Company in NorthAmerica, (iii) adjustments to interest expense to reflect theCompany's new capital structure, and (iv) correspondingadjustments to income tax expense.

These pro forma amounts arenot necessarily indicative of the results that would have been attainedif the Acquisition had occurred at the beginning of each periodpresented or that may be attained in the future.

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2.    Basis of Presentation  (Continued)

|                          |  |                                     |       |                                    |  |        |         |         |  |  |
|--------------------------|--|-------------------------------------|-------|------------------------------------|--|--------|---------|---------|--|--|
|                     |  | Predecessor(unaudited)              |
|                     |  | ThreeMonths endedSeptember 30, 2003 |       | Nine MonthsendedSeptember 30, 2003 |
| Netsales                 |  | $                                   | 711.4 |                               |  | $      | 2,064.1 |    |
| Operatingearnings (loss) |  |                                | 85.4  |                               |  |   | (46.1   | )  |
| Netincome (loss)         |  | $                                   | 9.4   |                               |  | $      | (227.3  | )  |
|                          |

TheCompany has not finalized the allocation of the purchase price as ofSeptember 30, 2004. The Company has preliminarily allocated thepurchase price on the basis of its current estimate of the fair valueof the underlying assets acquired and liabilities assumed asfollows:

|                                                  |  |                       |         |        |  |  |
|--------------------------------------------------|--|-----------------------|---------|--------|--|--|
|                                             |  | Asof November 4, 2003 |
| Currentassets:                                   |  |                  |    |   |
| Cash and cashequivalents                         |  | $                     | 24.3    |   |
| Trade accountsreceivable                         |  |                  | 477.5   |   |
| Inventories                                      |  |                  | 316.5   |   |
| Othercurrentassets                               |  |                  | 103.6   |   |
| Goodwill                                         |  |                  | 2,288.6 |   |
| Intangibleassets                                 |  |                  | 1,410.0 |   |
| Purchased in-process researchand development     |  |                  | 122.3   |   |
| Other noncurrentassets                           |  |                  | 366.3   |   |
| Property, plant andequipment                     |  |                  | 831.4   |   |
| Totalassetsacquired                              |  |                  | 5,940.5 |   |
|                                             |  |                  |    |   |
| Currentliabilities:                              |  |                  |    |   |
| Accountspayable                                  |  |                  | 138.7   |   |
| Accruedexpenses                                  |  |                  | 266.2   |   |
| Other currentliabilities                         |  |                  | 74.3    |   |
| Long-termdebt                                    |  |                  | 30.2    |   |
| Deferred incometaxes                             |  |                  | 645.2   |   |
| Accrued pension and otherpostretirement benefits |  |                  | 539.9   |   |
| Othernoncurrentliabilities                       |  |                  | 144.2   |   |
| Totalliabilitiesassumed                          |  |                  | 1,838.7 |   |
| Netassetsacquired                                |  | $                     | 4,101.8 |   |
|                                                  |

Cashand cash equivalents, trade accounts receivable, other current assets,accounts payable, accrued expenses and other current liabilities werestated at historical carrying values, given the short-term nature ofthese assets and liabilities. Inventory and long-term debt outstandingas of the effective date of the Acquisition have been recorded based onmanagement's judgments and estimates. The Company'sprojected pension and other postretirement benefit obligations andassets have been reflected in the allocation of purchase price at theprojected benefit obligation less plan assets at fair market value,based on management's computations which included valuationsperformed by independent actuaries engaged by the Company. Deferredincome taxes have been provided in the consolidated balance sheet basedon the Company's preliminary estimates of the tax versus bookbasis of the assets acquired and liabilities assumed, as adjusted toestimated fair values. Valuation allowances were established fordeferred tax assets related to all of the net operating losscarryforwards for which utilization is uncertain.

The Companyengaged independent appraisers to assist in determining the fair valuesof property, plant and equipment and intangible assets acquired,including purchased in-process research and 

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2.    Basis of Presentation  (Continued)

development (IPR&D), trade names,trademarks, developed technology and customer relationships. TheCompany has received preliminary values from the appraisers, which havebeen included in the above table, however, the final appraisals are notyet complete. Thus, the Company has not yet completed its allocation ofpurchase price and may make further adjustments to the preliminaryallocations. The Company expects to receive final valuations from theindependent appraisers in the final quarter of 2004 and complete itspurchase accounting by the fourth quarter of 2004.

The Companyrecorded a one-time charge for purchased IPR&D expenses of $122.3million during the nine months ended September 30, 2004. The value ofpurchased IPR&D was comprised of five ongoing development projectsat the date of the Acquisition. Purchased IPR&D was derived byassigning values to those projects identified by management as havingeconomic value, but that had not yet reached technological feasibilityand had no alternative future use. These products had not been releasedto the market as of the date of the Acquisition, but the features andfunctionality of the products had been defined.

During the ninemonths ended September 30, 2004, the Company reduced by $21.5 millionthe estimated fair value of property, plant and equipment to reflectthe most recent updated valuation provided by its independentappraisers.

Trademarks and trade names have been preliminarilyvalued based on the relief of royalty approach. This method allocatesvalue based on what the Company would be willing to pay as a royalty toa third-party owner of the trademark or trade name in order to exploitthe economic benefits. Trademarks and trade names that have been valuedunder this approach have a preliminary value of $830.0 million with anestimated indefinite life.

Patents and developed technology havebeen preliminarily valued based on the relief of royalty approach. Thismethod allocates value based on what the Company would be willing topay as a royalty to a third-party owner of the patent or technology inorder to exploit the economic benefits. The technologies that have beenvalued under this approach have a preliminary value of $100.0million with an estimated weighted average useful life of 10 years.

Customer relationships have been preliminarily valued using anincome approach after considering a fair return on fixed assets,working capital, patents, trade names, trademarks, technology, andassembled workforce. A preliminary value of $480.0  million hasbeen assigned to customer relationships. As of December 31, 2003, anestimated useful life of 10 years had been used based on preliminaryinformation obtained from our independent appraisers. In the ninemonths ended September 30, 2004, we obtained updated information fromour independent appraisers and revised the estimated useful life ofcustomer relationships to 16 years.

Based on the preliminaryestimates, approximately $3.4 billion of goodwill and other intangibleassets will not be deductible for income tax purposes. The primaryreasons for the Acquisition and the primary factors that contributed toa purchase price that resulted in recognition of goodwillinclude:

|              |                                                                                                                                                                                                                                                                     |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | The Company's leadingmarket position as a global provider of integrated water treatment andprocess improvement services, chemicals and equipment programs forindustrial and institutional applications offers a competitiveadvantage in competing for newcustomers; |

|              |                                                                                                                                                                                                                                                                                                                                             |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | The Company being one ofonly a small number of companies that can provide turnkey watermanagement solutions on a global basis (130 countries across sixcontinents) offers a competitive advantage in meeting the global needsof multinational customers and mitigates the potential impact ofvolatility in any individual country orregion; |

|              |                                                                                                                               |
|--------------|-------------------------------------------------------------------------------------------------------------------------------|
| •  | The diverse customer base andindustries served minimizes the potential impact of volatility from anyone customer or industry. |

Other considerations affecting thevalue of goodwill include:

|              |                                                                                        |
|--------------|----------------------------------------------------------------------------------------|
| •  | Thepotential for improved earnings and cash flow gained from operating asa stand-alone |

8

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2.    Basis of Presentation  (Continued)

|        |                                                                                                                                                                                                                      |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | company with focused management effort andmore efficient resource management and from the ability of theassembled work force to drive significant annual cost reductions in theadministrative and overheadfunctions; |

|              |                                                                                                                          |
|--------------|--------------------------------------------------------------------------------------------------------------------------|
| •  | The historical heavyinvestment in recruiting and continuously training more than 5,000sales professionals and engineers; |

|              |                                                                                                                                                                                                |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | Theability of the assembled workforce to develop future innovativetechnologies and products, as has been done in the past through afocused commitment to technology, research and development; |

|              |                                                                                                                                                                                                                                 |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| •  | The application of purchase accounting,particularly for such items as pension and other post-retirementbenefits for which significant reserve balances were recorded with nocorresponding significant short-term cash outflows. |

Inconjunction with the Acquisition, the Company has formulated a plan toexit or restructure certain activities. The Company has recordedliabilities of $34.4 million, primarily for employee severance andrelated costs, in connection with the Company's plan to exit orrestructure certain activities. As of September 30, 2004, $29.4 millionhas been charged against this accrual. The Company expects that theseactivities will be completed by the end of the third quarter 2005.

The consolidated statement of operations for the nine months endedSeptember 30, 2004 includes an additional $14.5 million in cost ofproducts sold related to the sale of inventory that had been revaluedat selling price less costs to sell in purchase accounting.

3.    Trade Accounts Receivable Securitization

In June2004, the Company entered into a three-year accounts receivablesecuritization facility with a commercial paper conduit sponsored byone of the lenders under the Company's senior credit facilities.The facility provides up to $100 million in funding, based onavailability of eligible trade accounts receivable and other customaryfactors.

In connection with the facility, the Companyestablished a bankruptcy-remote, wholly owned, special purpose limitedliability company (the "Transferor"), intowhich Nalco Company and one of its domestic subsidiaries (the"Sellers") transfer all eligible tradeaccounts receivable (the "Receivables").Pursuant to a Receivables Transfer Agreement, the Transferor thentransfers an undivided interest in the Receivables to the commercialpaper conduit or the related bank sponsor (the"Transferees") in exchange for cash.

The financing fee charged by the Transferees under the facility isbased on the amount funded and the conduit's cost of funds forissuing commercial paper plus a margin that varies based on theleverage ratio as calculated under the Company's senior creditfacilities. A commitment fee that varies based on the same ratio andthe unused portion of the facility is also charged by the conduit.Under the facility, Nalco Company services, administers and collectsthe Receivables, for which it receives a monthly servicing fee of1% per annum of the average daily outstanding balance ofReceivables.

Availability of funding under the facility dependsprimarily upon the outstanding Receivables balance from time to time.The facility may be terminated for, among other reasons, materialbreaches of representations and warranties, bankruptcies of the Sellersor the Transferor, a judgment or order for the payment of moneyrendered against the Transferor, cross-defaults to the Company'sother debt, or breach of specified financial covenants. The Company iscurrently in compliance with these covenants.

The facility isaccounted for as a secured borrowing, resulting in the funding andrelated Receivables being shown as liabilities and assets,respectively, on the Company's consolidated balance sheet and thecosts associated with the facility being recorded as interest expense.At September 30, 2004, the Company had outstanding borrowings of $47.6million under the facility, which the Company had used to repay termloans under the senior credit facilities.

9

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4.    Goodwill and OtherIntangible Assets

The changes in goodwill for the period wereasfollows:

|                                                   |  |        |         |         |  |  |
|---------------------------------------------------|--|--------|---------|---------|--|--|
| Balanceas of December 31, 2003                    |  | $      | 2,500.1 |    |
| Adjustmentto record purchased IPR&Dexpense    |  |   | (122.3  | )  |
| Adjustment of Ondeo NalcoGroup purchase price     |  |   | (25.3   | )  |
| Revised fairvalue of property, plant andequipment |  |   | 21.5    |    |
| Adjustment to fair value ofother long term assets |  |   | 1.5     |    |
| Adjustment toaccrued liabilities                  |  |   | 21.9    |    |
| Adjustment todeferred income taxes                |  |   | (22.6   | )  |
| Effect offoreign currencytranslation              |  |   | (15.7   | )  |
| Balanceas of September 30,2004                    |  | $      | 2,359.1 |    |
|                                                   |

Thefollowing table reflects intangible assets and related amortizationinformation:

|                                              |  |                         |         |                         |  |             |         |                         |  |        |         |        |  |        |         |         |  |  |
|----------------------------------------------|--|-------------------------|---------|-------------------------|--|-------------|---------|-------------------------|--|--------|---------|--------|--|--------|---------|---------|--|--|
|                                         |  | Asof September 30, 2004 |         | As of December 31,2003  |
|                                         |  | GrossAmount             |         | AccumulatedAmortization |  | GrossAmount |         | AccumulatedAmortization |
| Intangibleassets subject toamortization:     |  |                    |    |                    |  |
| Customerrelationships                        |  | $                       | 492.3   |                    |  | $           | (79.3   | )                  |  | $      | 494.4   |   |  | $      | (13.9   | )  |
| Patentsand developedtechnology               |  |                    | 100.5   |                    |  |        | (9.6    | )                  |  |   | 100.1   |   |  |   | (1.7    | )  |
| Intangibleassets not subject toamortization: |  |                    |    |                    |  |        |    |                    |  |
| Trademarksand tradenames                     |  |                    | 830.0   |                    |  |        | — |                    |  |   | 830.0   |   |  |   | — |    |
|                                         |  | $                       | 1,422.8 |                    |  | $           | (88.9   | )                  |  | $      | 1,424.5 |   |  | $      | (15.6   | )  |
|                                              |

5.    Debt

Debt consists of thefollowing:

|                                              |  |                  |         |                 |  |        |         |        |  |  |
|----------------------------------------------|--|------------------|---------|-----------------|--|--------|---------|--------|--|--|
|                                         |  | September30,2004 |         | December31,2003 |
| **Short-term**                               |  |             |    |            |  |   |    |   |
| Checksoutstanding and bankoverdrafts         |  | $                | 12.3    |            |  | $      | 19.5    |   |
| Notes payableto banks                        |  |             | 0.1     |            |  |   | 1.5     |   |
| Current maturitiesof long-term debt          |  |             | 1.3     |            |  |   | 29.2    |   |
| Notespayable to affiliatedcompanies          |  |             | — |            |  |   | 1.7     |   |
|                                         |  | $                | 13.7    |            |  | $      | 51.9    |   |
| **Long-term**                                |  |             |    |            |  |   |    |   |
| Revolvingcredit facility                     |  | $                | — |            |  | $      | 15.0    |   |
| Securitized trade accountsreceivablefacility |  |             | 47.6    |            |  |   | — |   |
| Term loan A,due November 2009                |  |             | 225.6   |            |  |   | 311.2   |   |
| Termloan B, due November2010                 |  |             | 1,095.9 |            |  |   | 1,300.0 |   |
| Senior notes,due November 2011               |  |             | 913.1   |            |  |   | 917.7   |   |
| Seniorsubordinated notes, due November2013   |  |             | 713.1   |            |  |   | 717.7   |   |
| Unsecured notes,due May2008                  |  |             | 27.8    |            |  |   | 27.8    |   |
| Other                                        |  |             | 3.9     |            |  |   | 2.6     |   |
|                                         |  |             | 3,027.0 |            |  |   | 3,292.0 |   |
| Less:Currentportion                          |  |             | 1.3     |            |  |   | 29.2    |   |
|                                         |  | $                | 3,025.7 |            |  | $      | 3,262.8 |   |
|                                              |

10

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6.    Unitholder'sEquity

Unitholder's equity consists of thefollowing:

|                                        |  |                   |         |                  |  |        |         |         |  |  |
|----------------------------------------|--|-------------------|---------|------------------|--|--------|---------|---------|--|--|
|                                   |  | September30, 2004 |         | December 31,2003 |
| Capitalaccount                         |  | $                 | 1,012.9 |             |  | $      | 1,001.9 |    |
| Accumulateddeficit                     |  |              | (118.3  | )           |  |   | (24.1   | )  |
| Accumulatedother comprehensiveincome:  |  |              |    |             |  |   |    |    |
| Foreign currencytranslationadjustments |  |              | 72.9    |             |  |   | 91.2    |    |
| Totalunitholder'sequity                |  | $                 | 967.5   |             |  | $      | 1,069.0 |    |
|                                        |

Duringthe nine months ended September 30, 2004, the Company receivedadditional capital contributions of $11.0 million from its directparent company, Nalco Finance Holdings LLC. This primarily resultedfrom $9.3 million of capital contributions received by theCompany's ultimate parent company, Nalco LLC, comprised of anadditional equity investment of $1.2 million by Dr. William H. Joyceand $8.1 million in proceeds from the sale of equity interests tocertain officers and key employees under the Nalco LLC 2004 Unit Plan.The remaining $1.7 million represented a portion of the proceeds fromthe senior discount notes issued by Nalco Finance Holdings LLC inJanuary 2004.

11

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7.    Pensionand Other Postretirement Benefit Plans

The components of netperiodic pension cost and the cost of other postretirement benefits forthe three months and nine months ended September 30, 2004 and 2003 wereasfollows:

|                                  |  |                                      |         |                                      |  |                                     |         |                                    |  |        |         |         |  |        |       |         |  |  |
|----------------------------------|--|--------------------------------------|---------|--------------------------------------|--|-------------------------------------|---------|------------------------------------|--|--------|---------|---------|--|--------|-------|---------|--|--|
|                             |  | PensionBenefits                      |
|                             |  | Successor                            |         | Predecessor                          |  | Successor                           |         | Predecessor                        |
|                             |  | ThreeMonths ended September 30, 2004 |         | ThreeMonths ended September 30, 2003 |  | NineMonths ended September 30, 2004 |         | NineMonths ended September 30,2003 |
| Servicecost                      |  | $                                    | 6.6     |                                 |  | $                                   | 5.1     |                               |  | $      | 21.1    |    |  | $      | 17.7  |    |
| Interestcost                     |  |                                 | 9.0     |                                 |  |                                | 7.7     |                               |  |   | 29.1    |    |  |   | 27.7  |    |
| Expectedreturn on planassets     |  |                                 | (6.3    | )                               |  |                                | (6.6    | )                             |  |   | (19.9   | )  |  |   | (24.4 | )  |
| Amortizationof prior servicecost |  |                                 | — |                                 |  |                                | (0.5    | )                             |  |   | — |    |  |   | (1.9  | )  |
| Recognizednet actuarialloss      |  |                                 | — |                                 |  |                                | 3.0     |                               |  |   | — |    |  |   | 11.1  |    |
| Specialterminationbenefits       |  |                                 | — |                                 |  |                                | — |                               |  |   | — |    |  |   | 0.6   |    |
| Settlementcharge                 |  |                                 | — |                                 |  |                                | — |                               |  |   | — |    |  |   | 0.7   |    |
| Curtailment                      |  |                                 | — |                                 |  |                                | — |                               |  |   | — |    |  |   | 0.9   |    |
| Netperiodiccost                  |  | $                                    | 9.3     |                                 |  | $                                   | 8.7     |                               |  | $      | 30.3    |    |  | $      | 32.4  |    |
|                                  |

|                                  |  |                                      |         |                                      |  |                                    |      |                                    |  |        |         |        |  |        |      |         |  |  |
|----------------------------------|--|--------------------------------------|---------|--------------------------------------|--|------------------------------------|------|------------------------------------|--|--------|---------|--------|--|--------|------|---------|--|--|
|                             |  | OtherPostretirementBenefits          |
|                             |  | Successor                            |         | Predecessor                          |  | Successor                          |      | Predecessor                        |
|                             |  | ThreeMonths ended September 30, 2004 |         | ThreeMonths ended September 30, 2003 |  | NineMonths ended September 30,2004 |      | NineMonths ended September 30,2003 |
| Servicecost                      |  | $                                    | 1.2     |                                 |  | $                                  | 1.0  |                               |  | $      | 4.1     |   |  | $      | 3.6  |    |
| Interestcost                     |  |                                 | 1.8     |                                 |  |                               | 1.7  |                               |  |   | 6.2     |   |  |   | 6.4  |    |
| Amortizationof prior servicecost |  |                                 | — |                                 |  |                               | (2.0 | )                             |  |   | — |   |  |   | (7.1 | )  |
| Recognizednet actuarialloss      |  |                                 | — |                                 |  |                               | 1.4  |                               |  |   | — |   |  |   | 5.1  |    |
| Netperiodiccost                  |  | $                                    | 3.0     |                                 |  | $                                  | 2.1  |                               |  | $      | 10.3    |   |  | $      | 8.0  |    |
|                                  |

OnDecember 8, 2003, the Medicare Prescription Drug, Improvement andModernization Act of 2003 (the Act) was signed into law. The Actexpands Medicare, primarily adding a prescription drug benefit forMedicare-eligible retirees starting in 2006. The Company has determinedthat prescription drug benefits that it provides to its retirees do notqualify for the federal subsidy provided by the Act. Accordingly, noaccounting recognition is required.

The Company contributed $4.1million to its principal domestic pension plan during the third quarter2004.

8.    Equity Compensation Plan

Nalco LLC, theCompany's ultimate parent company, established the Nalco LLC 2004Unit Plan (the "Plan") for purposes of (i)attracting and retaining exceptional officers and other key employees,non-employee directors and consultants of Nalco LLC and the Company and(ii) enabling such individuals to acquire an equity interest in NalcoLLC and to participate in the long-term growth and financial success ofNalco LLC and the Company.

During the second quarter 2004, NalcoLLC granted certain officers and key employees of the Company rights topurchase a designated number of one or more classes of equity interests("Units") in Nalco LLC. Those officers andkey employees who elected to purchase such Units did so at their fairvalue, as determined by an independent valuation advisor.

TheUnits subject to the Plan include Class A, Class B, Class C, and ClassD Units. The Class A Units are fully vested at the time of purchase byan employee and have economic characteristics that 

12

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are similar to those of shares of commonstock in a private corporation. The Class B, Class C, and Class D Unitsare subject to vesting provisions, meaning that in order for such Unitsto be entitled to distributions or other benefits, an employee willhave to continue to provide services for a certain period of time.However, with respect to the Class C and Class D Units, such vestingwill be accelerated if the Company achieves certain performancetargets. The Units also become fully vested 18 months after a change incontrol of the Company, subject to certain other conditions.

Though the Plan was established by the Company's ultimateparent company, the Company will account for the Plan since itseconomic substance is substantially the same for the Company and itsemployees. As permitted by SFAS No. 123, Accounting for Stock-BasedCompensation, the Company accounts for employee stock-basedcompensation in accordance with Accounting Principles Board Opinion No.25, Accounting for Stock Issued to Employees. Since the price ofthe Units offered was their fair value, no earned or unearnedcompensation expense was recognized on the grant date. The grant daterepresents the measurement date for the Class A, Class B, and Class CUnits, and these Units will be subject to"fixed" plan accounting. However, due to thevesting provisions of the Class D Units, the measurement date is notyet determined, and the Class D Units will be subject to"variable" plan accounting.

As aresult of the purchase of Units under the Plan by key officers andemployees, the Company received an additional contribution of capitalof $8.1 million.

9.    Business Optimization Expenses

During 2002, the Predecessor began a program to realign its supportfor the petroleum, petrochemical, pulp, and paper industries to provideone-stop process improvement and water treatment sales and service tothese key customers. As a result, the Predecessor incurred expenses of$5.1 million and $13.2 million during the three months and nine monthsended September 30, 2003, respectively, which consisted primarily ofseverance, outplacement, and employee relocations. This program wascompleted in 2003.

As a result of acquiring Exxon'sinterest in the Nalco/Exxon Energy Chemicals, L.P. (Nalco/Exxon) jointventure in 2001, the Predecessor incurred costs related to integratingthe operations of the joint venture with those of the Predecessor.Certain costs which were related to the integration, includingseverance, relocations, and asset impairments, were accrued as aliability on the date of acquisition. The Predecessor also incurredconsulting and other expenses that were charged to businessoptimization expenses during 2003 and 2002, including $0.4 million and$2.0 million during the three months and nine months ended September30, 2003, respectively.

13

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10.    Summary of Other Income(Expense)

The components of other income (expense), net for thethree months and nine months ended September 30, 2004 and 2003, includethefollowing:

|                                                 |  |                                      |         |                                      |  |                                     |         |                                     |  |        |         |         |  |        |         |         |  |  |
|-------------------------------------------------|--|--------------------------------------|---------|--------------------------------------|--|-------------------------------------|---------|-------------------------------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                            |  | Successor                            |         | Predecessor                          |  | Successor                           |         | Predecessor                         |
|                                            |  | ThreeMonths ended September 30, 2004 |         | ThreeMonths ended September 30, 2003 |  | NineMonths ended September 30, 2004 |         | NineMonths ended September 30, 2003 |
| Gain(loss) on sale of business                  |  | $                                    | — |                                 |  | $                                   | (5.7    | )                              |  | $      | — |    |  | $      | (5.0    | )  |
| Sponsor monitoringfees                          |  |                                 | (2.7    | )                               |  |                                | — |                                |  |   | (8.4    | )  |  |   | — |    |
| Suezmanagementfees                              |  |                                 | — |                                 |  |                                | (0.8    | )                              |  |   | — |    |  |   | (2.3    | )  |
| Franchisetaxes                                  |  |                                 | (0.8    | )                               |  |                                | 3.8     |                                |  |   | (2.3    | )  |  |   | 1.0     |    |
| Equityin earnings of unconsolidatedsubsidiaries |  |                                 | 1.1     |                                 |  |                                | 0.4     |                                |  |   | 2.4     |    |  |   | 1.7     |    |
| Foreigncurrency exchangeadjustments             |  |                                 | 0.2     |                                 |  |                                | (0.4    | )                              |  |   | (1.0    | )  |  |   | 2.8     |    |
| Terminationof interest rateswap                 |  |                                 | — |                                 |  |                                | (10.9   | )                              |  |   | — |    |  |   | (10.9   | )  |
| Other                                           |  |                                 | 1.0     |                                 |  |                                | 0.8     |                                |  |   | 2.8     |    |  |   | (0.3    | )  |
|                                            |  | $                                    | (1.2    | )                               |  | $                                   | (12.8   | )                              |  | $      | (6.5    | )  |  | $      | (13.0   | )  |
|                                                 |

11.    IncomeTaxes

The difference between the Company's effective taxrate and the U.S. federal tax rate of 35% for the threemonths ended September 30, 2004 is primarily attributable to theone-time impact of creating a tax-efficient method of repatriatingearnings from certain offshore subsidiaries and incremental U.S. taxeson the repatriation of other non-U.S. earnings.

The differencebetween the Predecessor's effective tax rate and the U.S. federaltax rate of 35% for the three months ended September 30, 2003was primarily attributable to the income tax impact on the loss on thesale of the Predecessor's South African subsidiary.

Thedifference between the Company's and the Predecessor'seffective tax rate and the U.S. federal tax rate of 35% for thenine months ended September 30, 2004 and September 30, 2003 isprimarily attributable to the nondeductible $122.3 million charge forpurchased IPR&D and the $244.4  million of nondeductiblegoodwill impairment, respectively. Other factors contributing to thedifference are the 2004 one-time impact of creating a tax efficientmethod of repatriating earnings from certain non-U.S. subsidiaries,incremental tax costs of repatriating non-U.S. earnings, non-U.S.taxes, state taxes and other permanent differences.

12.    Comprehensive Income

Total comprehensive incomeand its components, net of related tax, for the three months and ninemonths ended September 30, 2004 and 2003, are asfollows:

|                                                 |  |                                      |         |                                      |  |                                     |      |                                     |  |        |         |         |  |        |        |         |  |  |
|-------------------------------------------------|--|--------------------------------------|---------|--------------------------------------|--|-------------------------------------|------|-------------------------------------|--|--------|---------|---------|--|--------|--------|---------|--|--|
|                                            |  | Successor                            |         | Predecessor                          |  | Successor                           |      | Predecessor                         |
|                                            |  | ThreeMonths ended September 30, 2004 |         | ThreeMonths ended September 30, 2003 |  | NineMonths ended September 30, 2004 |      | NineMonths ended September 30, 2003 |
| Netincome(loss)                                 |  | $                                    | 12.4    |                                 |  | $                                   | 33.7 |                                |  | $      | (94.2   | )  |  | $      | (154.0 | )  |
| Other comprehensive income, net of incometaxes: |  |
| Gain on derivativeinstruments                   |  |                                 | — |                                 |  |                                | 8.0  |                                |  |   | — |    |  |   | 8.5    |    |
| Foreigncurrency translationadjustments          |  |                                 | 44.3    |                                 |  |                                | 13.2 |                                |  |   | (18.3   | )  |  |   | 50.9   |    |
| Comprehensiveincome(loss)                       |  | $                                    | 56.7    |                                 |  | $                                   | 54.9 |                                |  | $      | (112.5  | )  |  | $      | (94.6  | )  |
|                                                 |

14

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13.    Segment Information

TheCompany provides integrated water treatment and process improvementservices for industrial and institutional applications, usingtechnologically advanced solutions, combining chemical products andequipment, and consistent, reliable on-site service and expertise.These solutions and services enable the Company's customers toimprove production yields, lower manufacturing costs, extend assetlives and maintain environmental standards at costs that represent asmall share of their overall production expense.

The Company isorganized based on the end markets it serves. The organization iscomprised of the following reportable segments:

Industrialand Institutional Services – This segment serves the globalwater treatment and process chemical needs of the industrial,institutional, and municipal markets.

Energy Services– This segment serves the process chemicals and watertreatment needs of the global petroleum and petrochemical industries inboth upstream and downstream applications.

Paper Services– This segment serves the process chemicals and watertreatment needs of the global pulp and paper industry.

Other – This segment serves the alternative channelsto market, supply chain activities, and certain other operatingexpenses not allocated to a segment. It also includes theCompany's subsidiary in India and the Katayama Nalco jointventure.

Beginning with the three months ended September 30,2004, the Company began reporting Pacific region results related to theIndustrial and Institutional Services segment and the Paper Servicessegment with those segments. These results had previously been reportedin the Other segment. Amounts for prior periods have been restated toconform with this change in the composition of the Company'sreportable segments.

The Company evaluates the performance ofits segments based on "direct contribution",which is defined as net sales, less cost of products sold (excludingvariances to standard costs), selling and service expenses, marketingexpenses and research expenses directly attributable to each segment.There are no intersegment revenues. Prior year data have beenreclassified between segments to conform to the current yearpresentation.

Net sales by reportable segment were asfollows:

|                                      |  |                                      |       |                                      |  |                                     |       |                                   |  |        |         |        |  |        |         |        |  |  |
|--------------------------------------|--|--------------------------------------|-------|--------------------------------------|--|-------------------------------------|-------|-----------------------------------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                                 |  | Successor                            |       | Predecessor                          |  | Successor                           |       | Predecessor                       |
|                                 |  | ThreeMonths ended September 30, 2004 |       | ThreeMonths ended September 30, 2003 |  | NineMonths ended September 30, 2004 |       | NineMonths endedSeptember 30,2003 |
| Industrial and InstitutionalServices |  | $                                    | 355.4 |                                 |  | $                                   | 336.1 |                              |  | $      | 1,036.7 |   |  | $      | 954.6   |   |
| EnergyServices                       |  |                                 | 200.1 |                                 |  |                                | 180.8 |                              |  |   | 592.2   |   |  |   | 531.1   |   |
| PaperServices                        |  |                                 | 164.7 |                                 |  |                                | 159.8 |                              |  |   | 490.0   |   |  |   | 463.2   |   |
| Other                                |  |                                 | 54.0  |                                 |  |                                | 34.7  |                              |  |   | 109.0   |   |  |   | 115.2   |   |
| Netsales                             |  | $                                    | 774.2 |                                 |  | $                                   | 711.4 |                              |  | $      | 2,227.9 |   |  | $      | 2,064.1 |   |
|                                      |

15

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The following table presents directcontribution by reportable segment and reconciles the total segmentdirect contribution to earnings (loss) before incometaxes:

|                                            |  |                                      |         |                                      |  |                                     |         |                                   |  |        |         |         |  |        |         |         |  |  |
|--------------------------------------------|--|--------------------------------------|---------|--------------------------------------|--|-------------------------------------|---------|-----------------------------------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                       |  | Successor                            |         | Predecessor                          |  | Successor                           |         | Predecessor                       |
|                                       |  | ThreeMonths ended September 30, 2004 |         | ThreeMonths ended September 30, 2003 |  | NineMonths ended September 30, 2004 |         | NineMonths endedSeptember 30,2003 |
| Segment directcontribution:                |  |
| Industrial and InstitutionalServices       |  | $                                    | 88.0    |                                 |  | $                                   | 94.0    |                              |  | $      | 257.7   |    |  | $      | 239.9   |    |
| EnergyServices                             |  |                                 | 40.0    |                                 |  |                                | 41.0    |                              |  |   | 124.8   |    |  |   | 121.9   |    |
| PaperServices                              |  |                                 | 35.8    |                                 |  |                                | 39.5    |                              |  |   | 112.1   |    |  |   | 108.2   |    |
| Other                                      |  |                                 | (4.1    | )                               |  |                                | (10.7   | )                            |  |   | (45.4   | )  |  |   | (32.6   | )  |
| Totalsegment directcontribution            |  |                                 | 159.7   |                                 |  |                                | 163.8   |                              |  |   | 449.2   |    |  |   | 437.4   |    |
| Income(expenses) not allocated tosegments: |  |
| Administrativeexpenses                     |  |                                 | (41.9   | )                               |  |                                | (51.8   | )                            |  |   | (139.2  | )  |  |   | (158.7  | )  |
| Amortizationof intangibleassets            |  |                                 | (23.9   | )                               |  |                                | (20.5   | )                            |  |   | (73.0   | )  |  |   | (61.8   | )  |
| Impairmentofgoodwill                       |  |                                 | — |                                 |  |                                | — |                              |  |   | — |    |  |   | (244.4  | )  |
| In-processresearch anddevelopment          |  |                                 | — |                                 |  |                                | — |                              |  |   | (122.3  | )  |  |   | — |    |
| Businessoptimizationexpenses               |  |                                 | — |                                 |  |                                | (5.5    | )                            |  |   | — |    |  |   | (15.2   | )  |
| Operatingearnings(loss)                    |  |                                 | 93.9    |                                 |  |                                | 86.0    |                              |  |   | 114.7   |    |  |   | (42.7   | )  |
| Otherincome (expense),net                  |  |                                 | (1.2    | )                               |  |                                | (12.8   | )                            |  |   | (6.5    | )  |  |   | (13.0   | )  |
| Interestincome                             |  |                                 | 2.3     |                                 |  |                                | 1.1     |                              |  |   | 7.7     |    |  |   | 5.4     |    |
| Interestexpense                            |  |                                 | (53.7   | )                               |  |                                | (9.7    | )                            |  |   | (159.7  | )  |  |   | (29.2   | )  |
| Earnings(loss) before incometaxes          |  | $                                    | 41.3    |                                 |  | $                                   | 64.6    |                              |  | $      | (43.8   | )  |  | $      | (79.5   | )  |
|                                            |

14.    Contingenciesand Litigation

Various claims, lawsuits and administrativeproceedings are pending or threatened against the Company and itssubsidiaries, arising from the ordinary course of business with respectto commercial, intellectual property, product liability, employee andenvironmental matters. Historically these matters have not had amaterial impact on the consolidated financial position of the Company.However, the Company cannot predict the outcome of any litigation orthe potential for future litigation.

The Company has been namedas a potentially responsible party (PRP) by the EnvironmentalProtection Agency or state enforcement agencies at three waste siteswhere some financial contribution is or may be required. These agencieshave also identified many other parties who may be responsible forclean up costs at these waste disposal sites. The Company'sfinancial contribution to remediate these sites is expected to beminor. There has been no significant financial impact on the Company upto the present, nor is it anticipated that there will be in the future,as a result of these matters. The Company has made and will continue tomake provisions for these costs if the Company's liabilitybecomes probable and when costs can be reasonably estimated. TheCompany's undiscounted reserves for known environmental clean upcosts were $2.0 million at September 30, 2004.

Theseenvironmental reserves represent management's current estimate ofits proportional clean-up costs and are based upon negotiation andagreement with enforcement agencies, its previous experience withrespect to clean-up activities, a detailed review by the Company ofknown conditions, and information about other PRPs. They are notreduced by any possible recoveries from insurance companies or otherPRPs not specifically identified. Although management cannot determinewhether or not a material effect on future operations is reasonablylikely to occur, given the evolving nature of environmentalregulations, it believes that the recorded reserve levels areappropriate estimates of the potential liability. Although settlementwill require future cash outlays, it is not expected that such

16

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outlays will materially impact theCompany's liquidity position. Expenditures for the three monthsand nine months ended September 30, 2004, relating to environmentalcompliance and clean up activities were not significant.

TheCompany has been named as a defendant in lawsuits based on claimedinvolvement in the supply of allegedly defective or hazardousmaterials. The plaintiffs in these cases seek damages for allegedpersonal injury or potential injury resulting from exposure to ourproducts or other chemicals. These matters have had a de minimisimpact on the Company's business historically and the Companydoes not anticipate these matters to present any material risk to theCompany's business in the future. Notwithstanding, the Companycannot predict the outcome of any such lawsuits or the involvement theCompany might have in these matters in the future.

The Companyhas received subpoenas from the U.S. Department of Justice fordocuments and testimony relating to its storage of claimed hazardousmaterials and the claimed leakage of wastewater at its plant inGaryville, Louisiana. No charges or indictments have been filed, butthe outcome of this investigation is unknown to the Company.

Inthe ordinary course of its business, the Company is also a party to anumber of lawsuits and is subject to various claims relating totrademarks, employee matters, contracts and chemicals, the outcome ofwhich, in the opinion of management, should not have a material effecton the consolidated financial position of the Company. However, wecannot predict the outcome of any litigation or the potential forfuture litigation. The Company maintains accruals and/or has insurancein those instances where there is reason to believe that significantcosts might be incurred.

15.    Guarantees

Nosignificant guarantees were outstanding at September 30, 2004, otherthan subsidiary-related performance guarantees.

The Company had$34.5 million of letters of credit outstanding at September 30,2004.

16.    Supplemental Guarantor Condensed FinancialStatements

In connection with the Acquisition, Nalco HoldingsLLC (presented as Parent in the following tables), through itswholly-owned subsidiary, Nalco Company (presented as Issuer in thefollowing tables), issued Senior Notes and Senior Subordinated Notes asfurther described in Note 5. The Senior Notes are fully,unconditionally and jointly and severally guaranteed on an unsecuredsenior basis and the Senior Subordinated Notes are fully,unconditionally and jointly and severally guaranteed on an unsecuredsenior subordinated basis, in each case, by Nalco Holdings LLC and bysubstantially all existing and future wholly owned restricted domesticsubsidiaries of Nalco Company (collectively, the"Guarantors"). All other subsidiaries ofNalco Holdings LLC, whether direct or indirect, do not guarantee theSenior Notes and Senior Subordinated Notes("Non-Guarantors"). The Guarantors alsounconditionally guarantee the Company's borrowings under theSenior Secured Credit Facilities on a senior secured basis.

Thefollowing unaudited condensed combining financial statements presentthe results of operations, financial position and cash flows of (1) theParent, (2) the Issuer, (3) the Guarantors, (4)  theNon-Guarantors and (5) eliminations to arrive at the information forNalco Holdings LLC on a combined basis. Separate financial statementsand other disclosures concerning the Guarantors are not presentedbecause management does not believe that such information is materialto investors.

17

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Nalco Holdings LLC andSubsidiariesCondensed Consolidating Balance Sheet September 30,2004 (Unaudited) (Dollars inMillions)

|                                                       |  |        |         |        |  |                       |         |                           |  |              |         |              |  |        |         |        |  |        |          |         |  |        |         |        |  |  |
|-------------------------------------------------------|--|--------|---------|--------|--|-----------------------|---------|---------------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|----------|---------|--|--------|---------|--------|--|--|
|                                                  |  | Parent |         | Issuer |  | GuarantorSubsidiaries |         | Non-GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| Cash& cash equivalents                            |  | $      | — |   |  | $                     | 6.0     |                      |  | $            | 0.6     |         |  | $      | 56.5    |   |  | $      | —  |    |  | $      | 63.1    |   |
| Trade accountsreceivable                              |  |   | — |   |  |                  | (14.0   | )                    |  |         | 4.8     |         |  |   | 532.4   |   |  |   | —  |    |  |   | 523.2   |   |
| Inventories– finishedproducts                   |  |   | — |   |  |                  | 66.0    |                      |  |         | 45.0    |         |  |   | 115.0   |   |  |   | —  |    |  |   | 226.0   |   |
| Inventories– materials & work inprocess     |  |   | — |   |  |                  | 13.5    |                      |  |         | 13.0    |         |  |   | 33.4    |   |  |   | —  |    |  |   | 59.9    |   |
| Intercompanyaccountsreceivable                        |  |   | — |   |  |                  | 62.9    |                      |  |         | 417.8   |         |  |   | 67.6    |   |  |   | (548.3   | )  |  |   | — |   |
| Prepaidexpenses, taxes, and other currentassets       |  |   | — |   |  |                  | 13.3    |                      |  |         | 2.1     |         |  |   | 45.2    |   |  |   | —  |    |  |   | 60.6    |   |
| Totalcurrentassets                                    |  |   | — |   |  |                  | 147.7   |                      |  |         | 483.3   |         |  |   | 850.1   |   |  |   | (548.3   | )  |  |   | 932.8   |   |
| Property,plant, and equipment,net                     |  |   | — |   |  |                  | 276.7   |                      |  |         | 154.1   |         |  |   | 385.0   |   |  |   | —  |    |  |   | 815.8   |   |
| Investmentin relatedparties                           |  |   | 980.4   |   |  |                  | 2,135.4 |                      |  |         | 368.9   |         |  |   | — |   |  |   | (3,484.7 | )  |  |   | — |   |
| Goodwill                                              |  |   | — |   |  |                  | 415.3   |                      |  |         | 618.1   |         |  |   | 1,325.7 |   |  |   | —  |    |  |   | 2,359.1 |   |
| Otherintangibles                                      |  |   | — |   |  |                  | 1,055.1 |                      |  |         | 61.7    |         |  |   | 217.1   |   |  |   | —  |    |  |   | 1,333.9 |   |
| Otherassets                                           |  |   | — |   |  |                  | 320.8   |                      |  |         | 20.2    |         |  |   | 44.4    |   |  |   | —  |    |  |   | 385.4   |   |
| Totalassets                                           |  | $      | 980.4   |   |  | $                     | 4,351.0 |                      |  | $            | 1,706.3 |         |  | $      | 2,822.3 |   |  | $      | (4,033.0 | )  |  | $      | 5,827.0 |   |
| Accountspayable                                       |  | $      | — |   |  | $                     | 68.1    |                      |  | $            | 36.3    |         |  | $      | 118.9   |   |  | $      | —  |    |  | $      | 223.3   |   |
| Short-termdebt                                        |  |   | — |   |  |                  | 1.7     |                      |  |         | 0.1     |         |  |   | 11.9    |   |  |   | —  |    |  |   | 13.7    |   |
| Othercurrentliabilities                               |  |   | — |   |  |                  | 77.5    |                      |  |         | 58.2    |         |  |   | 186.0   |   |  |   | —  |    |  |   | 321.7   |   |
| Intercompanyaccountspayable                           |  |   | — |   |  |                  | 421.6   |                      |  |         | 11.1    |         |  |   | 115.6   |   |  |   | (548.3   | )  |  |   | — |   |
| Totalcurrentliabilities                               |  |   | — |   |  |                  | 568.9   |                      |  |         | 105.7   |         |  |   | 432.4   |   |  |   | (548.3   | )  |  |   | 558.7   |   |
| Long-termdebt                                         |  |   | — |   |  |                  | 2,975.6 |                      |  |         | — |         |  |   | 50.1    |   |  |   | —  |    |  |   | 3,025.7 |   |
| Deferredincometaxes                                   |  |   | — |   |  |                  | 467.1   |                      |  |         | 17.9    |         |  |   | 75.8    |   |  |   | —  |    |  |   | 560.8   |   |
| Accruedpensionbenefits                                |  |   | — |   |  |                  | 221.3   |                      |  |         | 36.0    |         |  |   | 138.3   |   |  |   | —  |    |  |   | 395.6   |   |
| Otherliabilities                                      |  |   | — |   |  |                  | 252.7   |                      |  |         | 27.9    |         |  |   | 25.2    |   |  |   | —  |    |  |   | 305.8   |   |
| Totalotherliabilities                                 |  |   | — |   |  |                  | 3,916.7 |                      |  |         | 81.8    |         |  |   | 289.4   |   |  |   | —  |    |  |   | 4,287.9 |   |
| Minorityinterest                                      |  |   | 12.9    |   |  |                  | — |                      |  |         | — |         |  |   | 12.9    |   |  |   | (12.9    | )  |  |   | 12.9    |   |
| Totalunitholder's/shareholders'equity                 |  |   | 967.5   |   |  |                  | (134.6  | )                    |  |         | 1,518.8 |         |  |   | 2,087.6 |   |  |   | (3,471.8 | )  |  |   | 967.5   |   |
| Totalliabilities and unitholder's/shareholders'equity |  | $      | 980.4   |   |  | $                     | 4,351.0 |                      |  | $            | 1,706.3 |         |  | $      | 2,822.3 |   |  | $      | (4,033.0 | )  |  | $      | 5,827.0 |   |
|                                                       |

18

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Nalco Holdings LLC and SubsidiariesCondensed Consolidating Balance Sheet December 31, 2003(Successor) (Unaudited) (Dollars inMillions)

|                                                       |  |        |         |        |  |                       |         |                           |  |              |         |              |  |        |         |        |  |        |          |         |  |        |         |        |  |  |
|-------------------------------------------------------|--|--------|---------|--------|--|-----------------------|---------|---------------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|----------|---------|--|--------|---------|--------|--|--|
|                                                  |  | Parent |         | Issuer |  | GuarantorSubsidiaries |         | Non-GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| Cash& cashequivalents                             |  | $      | 4.0     |   |  | $                     | 22.5    |                      |  | $            | 1.8     |         |  | $      | 71.7    |   |  | $      | —  |    |  | $      | 100.0   |   |
| Trade accountsreceivable                              |  |   | — |   |  |                  | 96.3    |                      |  |         | 62.1    |         |  |   | 324.5   |   |  |   | —  |    |  |   | 482.9   |   |
| Inventories– finishedproducts                   |  |   | — |   |  |                  | 68.7    |                      |  |         | 46.9    |         |  |   | 118.0   |   |  |   | —  |    |  |   | 233.6   |   |
| Inventories– materials & work inprocess     |  |   | — |   |  |                  | 13.1    |                      |  |         | 11.2    |         |  |   | 37.2    |   |  |   | —  |    |  |   | 61.5    |   |
| Notesreceivable from relatedparties                   |  |   | — |   |  |                  | 52.0    |                      |  |         | 45.8    |         |  |   | 17.1    |   |  |   | (114.9   | )  |  |   | — |   |
| Otherreceivables from relatedparties                  |  |   | — |   |  |                  | 97.3    |                      |  |         | 266.3   |         |  |   | 1.7     |   |  |   | (365.3   | )  |  |   | — |   |
| Prepaidexpenses, taxes, and other currentassets       |  |   | 0.1     |   |  |                  | 51.7    |                      |  |         | 2.0     |         |  |   | 45.3    |   |  |   | (1.5     | )  |  |   | 97.6    |   |
| Totalcurrentassets                                    |  |   | 4.1     |   |  |                  | 401.6   |                      |  |         | 436.1   |         |  |   | 615.5   |   |  |   | (481.7   | )  |  |   | 975.6   |   |
| Property,plant, and equipment,net                     |  |   | — |   |  |                  | 303.4   |                      |  |         | 160.7   |         |  |   | 401.5   |   |  |   | —  |    |  |   | 865.6   |   |
| Investmentin relatedparties                           |  |   | 1,080.5 |   |  |                  | 2,082.5 |                      |  |         | 372.2   |         |  |   | — |   |  |   | (3,535.2 | )  |  |   | — |   |
| Goodwill                                              |  |   | — |   |  |                  | 550.4   |                      |  |         | 631.6   |         |  |   | 1,318.1 |   |  |   | —  |    |  |   | 2,500.1 |   |
| Otherintangibles                                      |  |   | — |   |  |                  | 1,084.5 |                      |  |         | 71.6    |         |  |   | 252.8   |   |  |   | —  |    |  |   | 1,408.9 |   |
| Otherassets                                           |  |   | — |   |  |                  | 342.5   |                      |  |         | 24.2    |         |  |   | 46.9    |   |  |   | —  |    |  |   | 413.6   |   |
| Totalassets                                           |  | $      | 1,084.6 |   |  | $                     | 4,764.9 |                      |  | $            | 1,696.4 |         |  | $      | 2,634.8 |   |  | $      | (4,016.9 | )  |  | $      | 6,163.8 |   |
| Accountspayable                                       |  | $      | — |   |  | $                     | 49.4    |                      |  | $            | 24.1    |         |  | $      | 82.4    |   |  | $      | —  |    |  | $      | 155.9   |   |
| Short-termdebt                                        |  |   | — |   |  |                  | 36.7    |                      |  |         | 2.9     |         |  |   | 12.3    |   |  |   | —  |    |  |   | 51.9    |   |
| Othercurrentliabilities                               |  |   | 4.0     |   |  |                  | 75.9    |                      |  |         | 53.4    |         |  |   | 189.2   |   |  |   | (1.5     | )  |  |   | 321.0   |   |
| Intercompanyaccountspayable                           |  |   | — |   |  |                  | 315.1   |                      |  |         | 79.2    |         |  |   | 85.9    |   |  |   | (480.2   | )  |  |   | — |   |
| Totalcurrentliabilities                               |  |   | 4.0     |   |  |                  | 477.1   |                      |  |         | 159.6   |         |  |   | 369.8   |   |  |   | (481.7   | )  |  |   | 528.8   |   |
| Long-termdebt                                         |  |   | — |   |  |                  | 3,260.9 |                      |  |         | — |         |  |   | 1.9     |   |  |   | —  |    |  |   | 3,262.8 |   |
| Deferredincometaxes                                   |  |   | — |   |  |                  | 508.7   |                      |  |         | 14.4    |         |  |   | 100.9   |   |  |   | —  |    |  |   | 624.0   |   |
| Accruedpensionbenefits                                |  |   | — |   |  |                  | 211.6   |                      |  |         | 32.2    |         |  |   | 130.3   |   |  |   | —  |    |  |   | 374.1   |   |
| Otherliabilities                                      |  |   | — |   |  |                  | 242.5   |                      |  |         | 26.0    |         |  |   | 25.0    |   |  |   | —  |    |  |   | 293.5   |   |
| Totalotherliabilities                                 |  |   | — |   |  |                  | 4,223.7 |                      |  |         | 72.6    |         |  |   | 258.1   |   |  |   | —  |    |  |   | 4,554.4 |   |
| Minorityinterest                                      |  |   | 11.6    |   |  |                  | — |                      |  |         | — |         |  |   | 11.6    |   |  |   | (11.6    | )  |  |   | 11.6    |   |
| Totalunitholder's/shareholders'equity                 |  |   | 1,069.0 |   |  |                  | 64.1    |                      |  |         | 1,464.2 |         |  |   | 1,995.3 |   |  |   | (3,523.6 | )  |  |   | 1,069.0 |   |
| Totalliabilities and unitholder's/shareholders'equity |  | $      | 1,084.6 |   |  | $                     | 4,764.9 |                      |  | $            | 1,696.4 |         |  | $      | 2,634.8 |   |  | $      | (4,016.9 | )  |  | $      | 6,163.8 |   |
|                                                       |

19

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Nalco Holdings LLC andSubsidiariesCondensed Consolidating Statement of OperationsThree Months ended September 30, 2004 (Unaudited) (DollarsinMillions)

|                                              |  |        |         |         |  |                       |         |                           |  |              |         |              |  |        |        |         |  |        |         |         |  |        |        |         |  |  |
|----------------------------------------------|--|--------|---------|---------|--|-----------------------|---------|---------------------------|--|--------------|---------|--------------|--|--------|--------|---------|--|--------|---------|---------|--|--------|--------|---------|--|--|
|                                         |  | Parent |         | Issuer  |  | GuarantorSubsidiaries |         | Non-GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| Netsales                                     |  | $      | — |    |  | $                     | 278.5   |                      |  | $            | 135.4   |         |  | $      | 430.0  |    |  | $      | (69.7   | )  |  | $      | 774.2  |    |
| Operatingcosts andexpenses:                  |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |   |    |  |   |    |    |  |   |   |    |
| Costof productsold                           |  |   | — |    |  |                  | (162.7  | )                    |  |         | (85.3   | )       |  |   | (216.4 | )  |  |   | 69.7    |    |  |   | (394.7 | )  |
| Selling,administrative, and researchexpenses |  |   | — |    |  |                  | (101.2  | )                    |  |         | (31.2   | )       |  |   | (129.3 | )  |  |   | — |    |  |   | (261.7 | )  |
| Amortizationof intangibleassets              |  |   | — |    |  |                  | (9.7    | )                    |  |         | (3.3    | )       |  |   | (10.9  | )  |  |   | — |    |  |   | (23.9  | )  |
| Totaloperating costs andexpenses             |  |   | — |    |  |                  | (273.6  | )                    |  |         | (119.8  | )       |  |   | (356.6 | )  |  |   | 69.7    |    |  |   | (680.3 | )  |
| Operatingearnings                            |  |   | — |    |  |                  | 4.9     |                      |  |         | 15.6    |         |  |   | 73.4   |    |  |   | — |    |  |   | 93.9   |    |
| Otherincome (expense),net                    |  |   | 14.1    |    |  |                  | 8.9     |                      |  |         | 15.3    |         |  |   | (16.6  | )  |  |   | (22.9   | )  |  |   | (1.2   | )  |
| Interestincome                               |  |   | — |    |  |                  | 1.9     |                      |  |         | 1.3     |         |  |   | 6.4    |    |  |   | (7.3    | )  |  |   | 2.3    |    |
| Interestexpense                              |  |   | — |    |  |                  | (57.1   | )                    |  |         | (2.1    | )       |  |   | (1.8   | )  |  |   | 7.3     |    |  |   | (53.7  | )  |
| Earnings(loss) before incometaxes            |  |   | 14.1    |    |  |                  | (41.4   | )                    |  |         | 30.1    |         |  |   | 61.4   |    |  |   | (22.9   | )  |  |   | 41.3   |    |
| Incometax benefit(provision)                 |  |   | — |    |  |                  | 3.0     |                      |  |         | (4.2    | )       |  |   | (25.8  | )  |  |   | (0.2    | )  |  |   | (27.2  | )  |
| Minorityinterests                            |  |   | (1.7    | )  |  |                  | — |                      |  |         | — |         |  |   | (1.7   | )  |  |   | 1.7     |    |  |   | (1.7   | )  |
| Netincome(loss)                              |  | $      | 12.4    |    |  | $                     | (38.4   | )                    |  | $            | 25.9    |         |  | $      | 33.9   |    |  | $      | (21.4   | )  |  | $      | 12.4   |    |
|                                              |

20

----

Nalco Holdings LLC and SubsidiariesCondensed Combining Statement of Operations Three Months endedSeptember 30, 2003 (Unaudited) (Dollars inMillions)

|                                              |  |        |         |                       |  |                           |         |              |  |          |        |         |  |        |         |         |  |        |        |         |  |  |
|----------------------------------------------|--|--------|---------|-----------------------|--|---------------------------|---------|--------------|--|----------|--------|---------|--|--------|---------|---------|--|--------|--------|---------|--|--|
|                                         |  | Issuer |         | GuarantorSubsidiaries |  | Non-GuarantorSubsidiaries |         | Eliminations |  | Combined |
| Netsales                                     |  | $      | 262.5   |                  |  | $                         | 126.4   |         |  | $        | 376.9  |    |  | $      | (54.4   | )  |  | $      | 711.4  |    |
| Operatingcosts andexpenses:                  |  |   |    |                  |  |                      |    |         |  |     |   |    |  |   |    |    |  |   |   |    |
| Costof productsold                           |  |   | (145.0  | )                |  |                      | (66.2   | )       |  |     | (181.1 | )  |  |   | 54.4    |    |  |   | (337.9 | )  |
| Selling,administrative, and researchexpenses |  |   | (103.9  | )                |  |                      | (37.9   | )       |  |     | (119.7 | )  |  |   | — |    |  |   | (261.5 | )  |
| Amortizationof intangibleassets              |  |   | (18.7   | )                |  |                      | (0.9    | )       |  |     | (0.9   | )  |  |   | — |    |  |   | (20.5  | )  |
| Businessoptimizationexpenses                 |  |   | (3.7    | )                |  |                      | 0.1     |         |  |     | (1.9   | )  |  |   | — |    |  |   | (5.5   | )  |
| Totaloperating costs andexpenses             |  |   | (271.3  | )                |  |                      | (104.9  | )       |  |     | (303.6 | )  |  |   | 54.4    |    |  |   | (625.4 | )  |
| Operatingearnings(loss)                      |  |   | (8.8    | )                |  |                      | 21.5    |         |  |     | 73.3   |    |  |   | — |    |  |   | 86.0   |    |
| Otherincome (expense),net                    |  |   | 7.3     |                  |  |                      | 22.6    |         |  |     | (34.8  | )  |  |   | (7.9    | )  |  |   | (12.8  | )  |
| Interestincome                               |  |   | 1.5     |                  |  |                      | 1.3     |         |  |     | (0.4   | )  |  |   | (1.3    | )  |  |   | 1.1    |    |
| Interestexpense                              |  |   | (8.1    | )                |  |                      | (0.3    | )       |  |     | (2.6   | )  |  |   | 1.3     |    |  |   | (9.7   | )  |
| Earnings(loss) before incometaxes            |  |   | (8.1    | )                |  |                      | 45.1    |         |  |     | 35.5   |    |  |   | (7.9    | )  |  |   | 64.6   |    |
| Incometax benefit(provision)                 |  |   | (8.2    | )                |  |                      | (11.7   | )       |  |     | (9.6   | )  |  |   | — |    |  |   | (29.5  | )  |
| Minorityinterests                            |  |   | — |                  |  |                      | — |         |  |     | (1.4   | )  |  |   | — |    |  |   | (1.4   | )  |
| Netincome(loss)                              |  | $      | (16.3   | )                |  | $                         | 33.4    |         |  | $        | 24.5   |    |  | $      | (7.9    | )  |  | $      | 33.7   |    |
|                                              |

21

----

Nalco Holdings LLC and SubsidiariesCondensed Consolidating Statement of Operations Nine Months endedSeptember 30, 2004 (Unaudited) (Dollars inMillions)

|                                              |  |        |         |         |  |                       |         |                           |  |              |         |              |  |        |          |         |  |        |         |         |  |        |          |         |  |  |
|----------------------------------------------|--|--------|---------|---------|--|-----------------------|---------|---------------------------|--|--------------|---------|--------------|--|--------|----------|---------|--|--------|---------|---------|--|--------|----------|---------|--|--|
|                                         |  | Parent |         | Issuer  |  | GuarantorSubsidiaries |         | Non-GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| Netsales                                     |  | $      | — |    |  | $                     | 810.6   |                      |  | $            | 398.3   |         |  | $      | 1,218.0  |    |  | $      | (199.0  | )  |  | $      | 2,227.9  |    |
| Operatingcosts andexpenses:                  |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |     |    |  |   |    |    |  |   |     |    |
| Costof productsold                           |  |   | — |    |  |                  | (462.9  | )                    |  |         | (244.6  | )       |  |   | (619.9   | )  |  |   | 199.0   |    |  |   | (1,128.4 | )  |
| Selling,administrative, and researchexpenses |  |   | — |    |  |                  | (327.8  | )                    |  |         | (87.9   | )       |  |   | (373.8   | )  |  |   | — |    |  |   | (789.5   | )  |
| Amortizationof intangibleassets              |  |   | — |    |  |                  | (29.6   | )                    |  |         | (9.8    | )       |  |   | (33.6    | )  |  |   | — |    |  |   | (73.0    | )  |
| In-processresearch anddevelopment            |  |   | — |    |  |                  | (108.6  | )                    |  |         | (13.7   | )       |  |   | —  |    |  |   | — |    |  |   | (122.3   | )  |
| Totaloperating costs andexpenses             |  |   | — |    |  |                  | (928.9  | )                    |  |         | (356.0  | )       |  |   | (1,027.3 | )  |  |   | 199.0   |    |  |   | (2,113.2 | )  |
| Operatingearnings(loss)                      |  |   | — |    |  |                  | (118.3  | )                    |  |         | 42.3    |         |  |   | 190.7    |    |  |   | — |    |  |   | 114.7    |    |
| Otherincome (expense),net                    |  |   | (90.6   | )  |  |                  | 39.9    |                      |  |         | 25.3    |         |  |   | (54.7    | )  |  |   | 73.6    |    |  |   | (6.5     | )  |
| Interestincome                               |  |   | — |    |  |                  | 6.8     |                      |  |         | 3.4     |         |  |   | 7.9      |    |  |   | (10.4   | )  |  |   | 7.7      |    |
| Interestexpense                              |  |   | — |    |  |                  | (163.3  | )                    |  |         | (2.6    | )       |  |   | (4.2     | )  |  |   | 10.4    |    |  |   | (159.7   | )  |
| Earnings(loss) before incometaxes            |  |   | (90.6   | )  |  |                  | (234.9  | )                    |  |         | 68.4    |         |  |   | 139.7    |    |  |   | 73.6    |    |  |   | (43.8    | )  |
| Incometax benefit(provision)                 |  |   | — |    |  |                  | 20.0    |                      |  |         | (5.7    | )       |  |   | (60.9    | )  |  |   | (0.2    | )  |  |   | (46.8    | )  |
| Minorityinterests                            |  |   | (3.6    | )  |  |                  | — |                      |  |         | — |         |  |   | (3.6     | )  |  |   | 3.6     |    |  |   | (3.6     | )  |
| Netincome(loss)                              |  | $      | (94.2   | )  |  | $                     | (214.9  | )                    |  | $            | 62.7    |         |  | $      | 75.2     |    |  | $      | 77.0    |    |  | $      | (94.2    | )  |
|                                              |

22

----

Nalco Holdings LLC and SubsidiariesCondensed Combining Statement of Operations Nine Months endedSeptember 30, 2003 (Unaudited) (Dollars inMillions)

|                                              |  |        |          |                       |  |                           |         |              |  |          |         |         |  |        |         |         |  |        |          |         |  |  |
|----------------------------------------------|--|--------|----------|-----------------------|--|---------------------------|---------|--------------|--|----------|---------|---------|--|--------|---------|---------|--|--------|----------|---------|--|--|
|                                         |  | Issuer |          | GuarantorSubsidiaries |  | Non-GuarantorSubsidiaries |         | Eliminations |  | Combined |
| Netsales                                     |  | $      | 772.6    |                  |  | $                         | 379.1   |         |  | $        | 1,074.3 |    |  | $      | (161.9  | )  |  | $      | 2,064.1  |    |
| Operatingcosts andexpenses:                  |  |   |     |                  |  |                      |    |         |  |     |    |    |  |   |    |    |  |   |     |    |
| Costof productsold                           |  |   | (415.6   | )                |  |                      | (213.0  | )       |  |     | (526.1  | )  |  |   | 161.9   |    |  |   | (992.8   | )  |
| Selling,administrative, and researchexpenses |  |   | (341.8   | )                |  |                      | (108.0  | )       |  |     | (342.8  | )  |  |   | — |    |  |   | (792.6   | )  |
| Impairmentofgoodwill                         |  |   | (244.4   | )                |  |                      | — |         |  |     | — |    |  |   | — |    |  |   | (244.4   | )  |
| Amortizationof intangibleassets              |  |   | (56.2    | )                |  |                      | (2.9    | )       |  |     | (2.7    | )  |  |   | — |    |  |   | (61.8    | )  |
| Businessoptimizationexpenses                 |  |   | (12.7    | )                |  |                      | (0.2    | )       |  |     | (2.3    | )  |  |   | — |    |  |   | (15.2    | )  |
| Totaloperating costs andexpenses             |  |   | (1,070.7 | )                |  |                      | (324.1  | )       |  |     | (873.9  | )  |  |   | 161.9   |    |  |   | (2,106.8 | )  |
| Operatingearnings(loss)                      |  |   | (298.1   | )                |  |                      | 55.0    |         |  |     | 200.4   |    |  |   | — |    |  |   | (42.7    | )  |
| Otherincome (expense),net                    |  |   | 48.5     |                  |  |                      | 28.4    |         |  |     | (52.4   | )  |  |   | (37.5   | )  |  |   | (13.0    | )  |
| Interestincome                               |  |   | 4.0      |                  |  |                      | 4.1     |         |  |     | 1.3     |    |  |   | (4.0    | )  |  |   | 5.4      |    |
| Interestexpense                              |  |   | (24.2    | )                |  |                      | (1.2    | )       |  |     | (7.8    | )  |  |   | 4.0     |    |  |   | (29.2    | )  |
| Earnings(loss) before incometaxes            |  |   | (269.8   | )                |  |                      | 86.3    |         |  |     | 141.5   |    |  |   | (37.5   | )  |  |   | (79.5    | )  |
| Incometax benefit(provision)                 |  |   | (7.1     | )                |  |                      | (14.1   | )       |  |     | (48.9   | )  |  |   | — |    |  |   | (70.1    | )  |
| Minorityinterests                            |  |   | —  |                  |  |                      | — |         |  |     | (4.4    | )  |  |   | — |    |  |   | (4.4     | )  |
| Netincome(loss)                              |  | $      | (276.9   | )                |  | $                         | 72.2    |         |  | $        | 88.2    |    |  | $      | (37.5   | )  |  | $      | (154.0   | )  |
|                                              |

23

----

Nalco Holdings LLC andSubsidiaries Condensed Consolidating Statement of Cash FlowsNine Months ended September 30, 2004 (Unaudited)(Dollars inMillions)

|                                                             |  |        |         |         |  |                       |         |                           |  |              |         |              |  |        |         |         |  |        |         |         |  |        |         |         |  |  |
|-------------------------------------------------------------|--|--------|---------|---------|--|-----------------------|---------|---------------------------|--|--------------|---------|--------------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                                        |  | Parent |         | Issuer  |  | GuarantorSubsidiaries |         | Non-GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| **Operatingactivities**                                     |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |    |    |  |   |    |    |  |   |    |    |
| Netincome(loss)                                             |  | $      | (94.2   | )  |  | $                     | (214.9  | )                    |  | $            | 62.7    |         |  | $      | 75.2    |    |  | $      | 77.0    |    |  | $      | (94.2   | )  |
| Noncashadjustments                                          |  |   | 94.6    |    |  |                  | 195.7   |                      |  |         | 45.8    |         |  |   | 60.0    |    |  |   | (90.6   | )  |  |   | 305.5   |    |
| Changesin operating assets andliabilities                   |  |   | (4.1    | )  |  |                  | 99.6    |                      |  |         | 8.7     |         |  |   | (59.3   | )  |  |   | — |    |  |   | 44.9    |    |
| Netcash provided by (used for) operatingactivities          |  |   | (3.7    | )  |  |                  | 80.4    |                      |  |         | 117.2   |         |  |   | 75.9    |    |  |   | (13.6   | )  |  |   | 256.2   |    |
| **Investingactivities**                                     |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |    |    |  |   |    |    |  |   |    |    |
| Purchaseprice adjustment on acquisition of Ondeo NalcoGroup |  |   | (0.3    | )  |  |                  | 25.6    |                      |  |         | — |         |  |   | — |    |  |   | — |    |  |   | 25.3    |    |
| Additionsto property, plant, and equipment,net              |  |   | — |    |  |                  | (12.9   | )                    |  |         | (3.9    | )       |  |   | (40.9   | )  |  |   | — |    |  |   | (57.7   | )  |
| Businesspurchases/sales,net                                 |  |   | (11.0   | )  |  |                  | (3.0    | )                    |  |         | (0.3    | )       |  |   | (0.1    | )  |  |   | 14.4    |    |  |   | — |    |
| Otherinvestingactivities                                    |  |   | — |    |  |                  | 114.7   |                      |  |         | (23.4   | )       |  |   | (53.0   | )  |  |   | (43.4   | )  |  |   | (5.1    | )  |
| Netcash provided by (used for) investingactivities          |  |   | (11.3   | )  |  |                  | 124.4   |                      |  |         | (27.6   | )       |  |   | (94.0   | )  |  |   | (29.0   | )  |  |   | (37.5   | )  |
| **Financingactivities**                                     |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |    |    |  |   |    |    |  |   |    |    |
| Cashdividends                                               |  |   | — |    |  |                  | — |                      |  |         | (4.2    | )       |  |   | (9.4    | )  |  |   | 13.6    |    |  |   | — |    |
| Changesindebt                                               |  |   | — |    |  |                  | (232.3  | )                    |  |         | (87.1   | )       |  |   | 12.3    |    |  |   | 43.4    |    |  |   | (263.7  | )  |
| Capitalcontribution                                         |  |   | 11.0    |    |  |                  | 11.0    |                      |  |         | 0.5     |         |  |   | 2.9     |    |  |   | (14.4   | )  |  |   | 11.0    |    |
| Otherfinancingactivities                                    |  |   | — |    |  |                  | — |                      |  |         | — |         |  |   | (0.7    | )  |  |   | — |    |  |   | (0.7    | )  |
| Netcash provided by (used for) financingactivities          |  |   | 11.0    |    |  |                  | (221.3  | )                    |  |         | (90.8   | )       |  |   | 5.1     |    |  |   | 42.6    |    |  |   | (253.4  | )  |
| Effectof exchange rate changes oncash                       |  |   | — |    |  |                  | — |                      |  |         | — |         |  |   | (2.2    | )  |  |   | — |    |  |   | (2.2    | )  |
| Increase(decrease) incash                                   |  |   | (4.0    | )  |  |                  | (16.5   | )                    |  |         | (1.2    | )       |  |   | (15.2   | )  |  |   | — |    |  |   | (36.9   | )  |
| Cashat beginning ofperiod                                   |  |   | 4.0     |    |  |                  | 22.5    |                      |  |         | 1.8     |         |  |   | 71.7    |    |  |   | — |    |  |   | 100.0   |    |
| Cashat end ofperiod                                         |  | $      | — |    |  | $                     | 6.0     |                      |  | $            | 0.6     |         |  | $      | 56.5    |    |  | $      | — |    |  | $      | 63.1    |    |
|                                                             |

24

----

Nalco Holdings LLC and SubsidiariesCondensed Combining Statement of Cash Flows Nine Months endedSeptember 30, 2003 (Unaudited)(Dollars inMillions)

|                                                |  |        |         |                       |  |                           |         |              |  |          |        |         |  |        |         |         |  |        |        |         |  |  |
|------------------------------------------------|--|--------|---------|-----------------------|--|---------------------------|---------|--------------|--|----------|--------|---------|--|--------|---------|---------|--|--------|--------|---------|--|--|
|                                           |  | Issuer |         | GuarantorSubsidiaries |  | Non-GuarantorSubsidiaries |         | Eliminations |  | Combined |
| **Operatingactivities**                        |  |   |    |                  |  |                      |    |         |  |     |   |    |  |   |    |    |  |   |   |    |
| Netincome(loss)                                |  | $      | (276.9  | )                |  | $                         | 72.2    |         |  | $        | 88.2   |    |  | $      | (37.5   | )  |  | $      | (154.0 | )  |
| Noncashadjustments                             |  |   | 348.5   |                  |  |                      | 25.0    |         |  |     | 49.0   |    |  |   | 25.0    |    |  |   | 447.5  |    |
| Changesin operating assets andliabilities      |  |   | (25.5   | )                |  |                      | (11.6   | )       |  |     | 6.3    |    |  |   | — |    |  |   | (30.8  | )  |
| Netcash provided by operatingactivities        |  |   | 46.1    |                  |  |                      | 85.6    |         |  |     | 143.5  |    |  |   | (12.5   | )  |  |   | 262.7  |    |
| **Investingactivities**                        |  |   |    |                  |  |                      |    |         |  |     |   |    |  |   |    |    |  |   |   |    |
| Additionsto property, plant, and equipment,net |  |   | (20.1   | )                |  |                      | (8.7    | )       |  |     | (38.1  | )  |  |   | — |    |  |   | (66.9  | )  |
| Businesspurchases/sales,net                    |  |   | 25.7    |                  |  |                      | (0.8    | )       |  |     | (54.9  | )  |  |   | 4.4     |    |  |   | (25.6  | )  |
| Otherinvestingactivities                       |  |   | 40.6    |                  |  |                      | (37.2   | )       |  |     | 2.6    |    |  |   | (41.4   | )  |  |   | (35.4  | )  |
| Netcash (used for) investingactivities         |  |   | 46.2    |                  |  |                      | (46.7   | )       |  |     | (90.4  | )  |  |   | (37.0   | )  |  |   | (127.9 | )  |
| **Financingactivities**                        |  |   |    |                  |  |                      |    |         |  |     |   |    |  |   |    |    |  |   |   |    |
| Cashdividends                                  |  |   | — |                  |  |                      | (6.3    | )       |  |     | (35.2  | )  |  |   | 12.5    |    |  |   | (29.0  | )  |
| Changesindebt                                  |  |   | (92.2   | )                |  |                      | (40.7   | )       |  |     | (15.3  | )  |  |   | 41.4    |    |  |   | (106.8 | )  |
| Capitalcontribution                            |  |   | — |                  |  |                      | 4.4     |         |  |     | 31.6   |    |  |   | (4.4    | )  |  |   | 31.6   |    |
| Otherfinancingactivities                       |  |   | — |                  |  |                      | (0.4    | )       |  |     | (2.2   | )  |  |   | — |    |  |   | (2.6   | )  |
| Netcash (provided by) financingactivities      |  |   | (92.2   | )                |  |                      | (43.0   | )       |  |     | (21.1  | )  |  |   | 49.5    |    |  |   | (106.8 | )  |
| Effectof exchange rate changes oncash          |  |   | — |                  |  |                      | — |         |  |     | 10.7   |    |  |   | — |    |  |   | 10.7   |    |
| Increase(decrease) incash                      |  |   | 0.1     |                  |  |                      | (4.1    | )       |  |     | 42.7   |    |  |   | — |    |  |   | 38.7   |    |
| Cashat beginning ofperiod                      |  |   | 1.0     |                  |  |                      | 4.4     |         |  |     | 115.1  |    |  |   | — |    |  |   | 120.5  |    |
| Cashat end ofperiod                            |  | $      | 1.1     |                  |  | $                         | 0.3     |         |  | $        | 157.8  |    |  | $      | — |    |  | $      | 159.2  |    |
|                                                |

25

----

|              |                                                                                      |
|--------------|--------------------------------------------------------------------------------------|
| Item2.  | Management's Discussion and Analysis ofFinancial Condition and Results of Operations |

The followingdiscussion and analysis of our financial condition and results ofoperations covers periods prior to the Transactions, defined as theacquisition of Ondeo Nalco Group, comprised of Nalco Company and NalcoInternational SAS Subsidiaries, by Nalco Holdings and the relatedfinancings in connection with such acquisition. Accordingly, thediscussion and analysis of historical periods prior to the Transactionsdo not reflect the significant impact that the Transactions have had onus. In addition, the statements in the discussion and analysisregarding industry outlook, our expectations regarding the performanceof our business and the other non-historical statements in thediscussion and analysis are forward-looking statements. Theseforward-looking statements are subject to numerous risks anduncertainties. Our actual results may differ materially from thosecontained in or implied by any forward-looking statements. You shouldread the following discussion together with the consolidated andcombined financial statements of Nalco Holdings LLC included elsewherein this report.

"Safe Harbor"Statement Under Private Securities Litigation Reform Act of 1995

This Quarterly Report for the fiscal quarter ended September 30,2004 (the "Quarterly Report") includes"forward-looking statements" within themeaning of Section 27A of the Securities Act of 1933 and Section 21E ofthe Securities Exchange Act of 1934. These forward-looking statementsinclude statements concerning our plans, objectives, goals, strategies,future events, future revenue or performance, capital expenditures,financing needs, plans or intentions relating to acquisitions, businesstrends and other information that is not historical information. Whenused in this Quarterly Report, the words"estimates,""expects,""anticipates,""projects,""plans," "intends,"" believes,""forecasts," or future or conditional verbs,such as "will,""should," "could"or "may," and variations of such words orsimilar expressions are intended to identify forward-lookingstatements. All forward-looking statements, including, withoutlimitation, management's examination of historical operatingtrends and data are based upon our current expectations and variousassumptions. Our expectations, beliefs and projections are expressed ingood faith and we believe there is a reasonable basis for them.However, there can be no assurance that management'sexpectations, beliefs and projections will be achieved.

Thereare a number of risks and uncertainties that could cause our actualresults to differ materially from the forward-looking statementscontained in this Quarterly Report. Additionally, important factorscould cause our actual results to differ materially from theforward-looking statements we make in this Quarterly Report. As statedelsewhere in this Quarterly Report, such risks, uncertainties and otherimportant factors include, among others:

|              |                          |
|--------------|--------------------------|
| •  | our substantialleverage; |

|              |                                                                                      |
|--------------|--------------------------------------------------------------------------------------|
| •  | limitations on flexibilityin operating our business contained in our debtagreements; |

|              |                             |
|--------------|-----------------------------|
| •  | increases in interestrates; |

|              |                                     |
|--------------|-------------------------------------|
| •  | pricing pressure from ourcustomers; |

|              |                                     |
|--------------|-------------------------------------|
| •  | technological change andinnovation; |

|              |                                               |
|--------------|-----------------------------------------------|
| •  | risks associated with ournon-U.S. operations; |

|              |                                         |
|--------------|-----------------------------------------|
| •  | fluctuations incurrency exchange rates; |

|              |                                                    |
|--------------|----------------------------------------------------|
| •  | manycompetitors in the markets in which weoperate; |

|              |                                                        |
|--------------|--------------------------------------------------------|
| •  | changes to environmental,health and safetyregulations; |

|              |                                                |
|--------------|------------------------------------------------|
| •  | operating hazards in ourproduction facilities; |

|              |                                             |
|--------------|---------------------------------------------|
| •  | our significantpension benefit obligations; |

|              |                                                                                                                                      |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------|
| •  | ourability to attract and retain skilled employees, particularly researchscientists, technical sales professionals and engineers;and |

|              |                                                                             |
|--------------|-----------------------------------------------------------------------------|
| •  | the possibility that ourowners' interests will conflict with ours or yours. |

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|              |                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------|
| Item2.  | Management's Discussion and Analysis ofFinancial Condition and Results of Operations  (Continued) |

There may be other factors that may causeour actual results to differ materially from the forward-lookingstatements. All forward-looking statements attributable to us orpersons acting on our behalf apply only as of the date of thisQuarterly Report and are expressly qualified in their entirety by thecautionary statements included in this Quarterly Report. We undertakeno obligation to update or revise forward-looking statements which maybe made to reflect events or circumstances that arise after the datemade or to reflect the occurrence of unanticipated events.

Executive Overview

During the three months ended September30, 2004, we generated strong sales growth compared to the three monthsended September 30, 2003, which enabled us to make discretionary debtreduction payments during the three months ended September 30, 2004,including paying down $90.0 million of term loan debt. Theseaccelerated payments helped reduce our indebtedness, net of our changein cash and cash equivalents, by $92.9 million during the three monthsended September 30, 2004.

Net sales for the three months endedSeptember 30, 2004 increased 8.8% to $774.2 million from $711.4million for the same period last year. Changes in foreign currencytranslation rates accounted for 3.3% of the growth. A total of$4.5 million, or 0.6%, of the increase in sales came from netacquisition/divestiture activity, driven primarily by the addition ofKatayama Nalco sales above the amount we contributed to the Japanesejoint venture, minus sales from our divested South Africa business. Onan organic basis, which excludes the impacts of changes in foreigncurrency translation rates and acquisitions and divestitures, our salesgrew 4.9% even as cool summer weather and hurricane-based plantshutdowns modestly affected sales.

All three of our majorsegments contributed to our sales growth during the three months endedSeptember 30, 2004, led by the Energy Services segment, which increasedsales 10.7% compared to the three months ended September 30,2003. Industrial and Institutional Services sales grew 5.7%,while Paper Services improved sales by 3.1%. The Other segment,consisting mainly of Katayama Nalco, our operations in India, ourIntegrated Channels Group and some miscellaneous sales, grew55.6% compared to the three months ended September 30, 2003,primarily as a result of our consolidation of Katayama Nalco'ssales.

Gross margins declined from 52.5% in the threemonths ended September 30, 2004 to 49.0% in the three monthsended September 30, 2003, largely due to freight and raw material costincreases and changes in product mix, with lower gross margin miningand oil and gas exploration services growing significantly faster thanour other business units, while above-average gross margin coolingwater sales grew more slowly as a result of cooler than normal July andAugust weather in North America.

During the three months endedSeptember 30, 2004, supply constraints of acrylic acid, cationicmonomer and silicone challenged us to raise prices and developalternate suppliers and products. While we had anticipated increasedcosts during this period, the magnitude of the cost increases has beenhigher than we had previously anticipated. We have, however, not facedshortages in a few significant raw materials since vendors haveallocated to us supplies of these materials.

We have a number ofoptions to counter these cost increases, including active pricemanagement, using existing alternative technologies and developing newofferings. All of these options take a period of time before thebenefits can be reflected in our results.

We have quickly movedto replace some products containing supply-constricted materials withalternative products while maintaining or improving customerperformance as fully as possible. We have also announced additionalprice increases in September 2004 designed to begin taking effectduring the fourth quarter of 2004. We expect these price increases tooffset higher freight costs, in addition to offsetting raw materialcosts that continued to rise through the three months ended September30, 2004. Because of the service nature of our business, it generallytakes several months before the full impacts of price increases arereflected in our results.

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|              |                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------|
| Item2.  | Management's Discussion and Analysis ofFinancial Condition and Results of Operations  (Continued) |

Certain of our new product programs alsoreduce our dependence on selected raw materials. Our 3DTRASAR® stress management system for cooling waterimproves customer performance while reducing demand foracrylic-acid-based products. In the three months ended September 30,2004, we had approximately $7.0 million of sales of our 3DTRASAR® stress management system.

Corporate-levelcost reductions contributed to a 9.2% improvement in operatingearnings in the three months ended September 30, 2004 compared to thesame period last year, of which 6.3% was organic (i.e.,excluding the impacts of changes in foreign currency translation ratesand acquisitions and divestitures).

Net income was $12.4 millionin the three months ended September 30, 2004, compared to $33.7 millionin the three months ended September 30, 2003. This change is primarilydue to changes in interest expense, which was $53.7 million during thethree months ended September 30, 2004 compared to $9.7 million duringthe three months ended September 30, 2003, prior to theAcquisition.

Our largest capital expenditure project in 2004 isfor information systems. In October 2004, we successfully completedconversion of our North America business to a new SAP platform. Weexpect our European operations to convert to the SAP platform at thebeginning of January 2005. In anticipation of a possible interruptionin product shipments due to the conversion, we plan to encourage ourEuropean customers to accept product shipments early, under normalterms of sale, which will result in the shifting of some sales from thefirst quarter of 2005 to the fourth quarter of 2004. We cannotreasonably estimate the impact of these sales on our fourth quarterresults at this time, but we expect the amounts to be fairly limited.We intend to clarify these impacts on our results when announcingfourth quarter sales and earnings.

The capital demands on ourbusiness remain low. For the three months ended September 30, 2004, ournet capital expenditures were $22.8 million compared to $26.5 millionin the three months ended September 30, 2003, with nearly one-third ofthe expenditures attributed to our SAP project. We expect capital costsfor information technology to decline in 2005 with the completion ofthe SAP project in Europe. However, we expect our annual capitalspending to remain at approximately $100 million in 2005 as we expandcapacity in a few select areas, such as our supply chain, to meetvolume growth.

Results of Operations

Three Months Ended September 30, 2004 Compared to theThree Months Ended September 30, 2003

Net sales for the quartersended September 30, 2004 and September 30, 2003 may be compared asfollows:

|                                       |  |                   |       |                   |  |         |       |                                               |  |                           |      |         |  |        |     |         |  |        |      |          |  |        |      |         |  |  |
|---------------------------------------|--|-------------------|-------|-------------------|--|---------|-------|-----------------------------------------------|--|---------------------------|------|---------|--|--------|-----|---------|--|--------|------|----------|--|--------|------|---------|--|--|
|                                  |  | Successor         |       | Predecessor       |  |    |       | Attributableto Changesin the FollowingFactors |
|                                  |  | Three MonthsEnded |       |
| (dollars inmillions)                  |  | September30,2004  |       | September 30,2003 |  | %Change |       | CurrencyTranslation                           |  | Acquisitions/Divestitures |      | Organic |
| Industrial& InstitutionalServices |  | $                 | 355.4 |              |  | $       | 336.1 |                                          |  |                      | 5.7  | %  |  |   | 3.5 | %  |  |   | (0.4 | )%  |  |   | 2.6  | %  |
| EnergyServices                        |  |              | 200.1 |              |  |    | 180.8 |                                          |  |                      | 10.7 | %  |  |   | 3.2 | %  |  |   | (1.9 | )%  |  |   | 9.4  | %  |
| PaperServices                         |  |              | 164.7 |              |  |    | 159.8 |                                          |  |                      | 3.1  | %  |  |   | 3.0 | %  |  |   | (1.4 | )%  |  |   | 1.5  | %  |
| Other                                 |  |              | 54.0  |              |  |    | 34.7  |                                          |  |                      | 55.6 | %  |  |   | 4.0 | %  |  |   | 33.1 | %   |  |   | 18.5 | %  |
| Netsales                              |  | $                 | 774.2 |              |  | $       | 711.4 |                                          |  |                      | 8.8  | %  |  |   | 3.3 | %  |  |   | 0.6  | %   |  |   | 4.9  | %  |
|                                       |

NetSales.    Net sales for the three months ended September 30,2004 were $774.2 million, an 8.8% increase over the $711.4million reported for the three months ended September 30, 2003. After

28

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|              |                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------|
| Item2.  | Management's Discussion and Analysis ofFinancial Condition and Results of Operations  (Continued) |

adjusting for the favorable effects ofchanges in foreign currency translation rates and the impact ofacquisitions and divestitures, net sales were up 4.9%. Thisimprovement was driven by favorable sales growth broadly spread acrossour customer base. The Energy Services division, led by strong oil andgas production service sales, posted significant organic growth insales of 9.4% over the same period last year. The Industrial andInstitutional Services division reported broad-based growth across mostof the markets and geographic regions it serves, led by its globalmining business. Solid gains in our water treatment business in theMiddle East, Latin America and the Pacific region, also contributed tothe 2.6% organic growth reported by the Industrial andInstitutional Services division. Organically, Paper Services divisionsales were slightly favorable compared to a year ago, reflectingcontinued growth in the Pacific region, Latin America and Europe,partly offset by the lingering effect of 2003 price and contractconcessions in North America. The variation in revenue recognitionadjustments for Europe and North America accounted for most of theorganic change inother"sales. In addition,other"sales include the sales of a new Japanese joint venture, KatayamaNalco, which was formed with Katayama Chemical Inc. to accelerate ourdevelopment in this important industrialized market. The increase inother"sales attributable to acquisitions/divestitures includes theincremental impact of Katayama Nalco, which was partially offset by theeffect of the 2003 divestiture of the Predecessor's South Africansubsidiary.

Gross Profit.    Gross profit, defined asthe difference between net sales and costs of products sold, of $379.5million for the three months ended September 30, 2004 increased by $6.0million, or 1.6%, over the $373.5 million reported for the threemonths ended September 30, 2003. Adjusted for the favorable effects ofchanges in foreign currency translation rates and the impact ofacquisitions and divestitures, gross profit decreased by $7.0 million,or 1.9%. The most notable factors contributing to this decreasewere the aforementioned increase in sales volumes, which favorablyimpacted gross profit by approximately $15.5 million, but which wasmore than offset by margin erosion mainly due to product mix ($11.0million), increased raw material ($4.5 million), and freight costs($4.0 million). The most significant margin erosion was in theIndustrial and Institutional Services division, whose gross profitmargin declined 3.9% from the three months ended September 30,2003. A significant portion of this decline was driven by the strongersales growth in lower margin business, primarily global mining. Thisunfavorable mix impact was amplified by raw material and freightincreases. In addition, both the Paper Services division and the EnergyServices division gross profit margin declined by more than 3%compared to the three months ended September 30, 2003. Paper Serviceswas mostly affected by the negative price impact resulting fromcontract renegotiations and by increased freight costs, whereas EnergyServices was mostly affected by a combination of mix — strongerorganic growth of lower margin upstream businesses — and higherraw material costs.

Selling, Administrative and ResearchExpenses.    Selling, administrative and research expenses forthe three months ended September 30, 2004 were $261.7 million, anincrease of $0.2 million, or 0.1%, from $261.5 million for thethree months ended September 30, 2003. Adjusted for the unfavorableeffects of changes in foreign currency translation rates and the impactof acquisitions and divestitures, selling, administrative, and researchexpenses decreased by $9.8 million, or 3.7%, primarily due tospending reduction initiatives launched at the end of 2003 andtightened spending controls in 2004.

Amortization ofIntangible Assets.    Amortization of intangible assets was$23.9 million and $20.5 million for the three months ended September30, 2004 and 2003, respectively. The increase resulted from higheramortization of intangible assets as a result of the Acquisition.

Business Optimization Expenses.    Business optimizationexpenses of $5.5 million for the three months ended September 30, 2003primarily represented expenses associated with the Predecessor'ssales and marketing business realignment launched in 2002.

Other Income (Expense), Net.    Other income (expense),net was an expense of $1.2 million and $12.8 million for the threemonths ended September 30, 2004 and 2003, respectively. Included in thethree months ended September 30, 2003 was a $10.9 million chargeresulting from the discontinuance 

29

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|              |                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------|
| Item2.  | Management's Discussion and Analysis ofFinancial Condition and Results of Operations  (Continued) |

of hedge accounting for an interest rate swapand a $5.3 million loss on the sale of the Predecessor's SouthAfrican subsidiary. Franchise taxes were $0.8 million for the threemonths ended September 30, 2004 compared to a credit of $3.8 millionfor the same period in 2003. This credit was due to an adjustment ofthe Predecessor's franchise tax accruals as a result of theplanned sale of the Predecessor and the expected change incapitalization. Suez management fees incurred by the Predecessor forthe three months ended September 30, 2003 were $0.8 million, whereasSponsor monitoring fees for the three months ended September 30, 2004were $2.7 million.

Net Interest Expense.    Netinterest expense, defined as the combination of interest income andinterest expense, was $51.4 million for the three months endedSeptember 30, 2004, an increase of $42.8 million from the $8.6 millionreported for the three months ended September 30, 2003. The increase isdue primarily to the interest charges incurred on the new debt used tofinance the Acquisition.

Effective Tax Rate.    Theeffective tax rate was 65.9% for the three months endedSeptember 30, 2004. The effective tax rate for the three months endedSeptember 30, 2003, after adjusting for the aforementioned sale of thePredecessor's South African subsidiary, was 37.5%. Theeffective tax rate in 2004 is higher than 2003 mostly because of theone-time impact of creating a tax-efficient method of repatriatingearnings from certain offshore subsidiaries and incremental U.S. taxeson the repatriation of other non-U.S. earnings.

MinorityInterest Expense.    Minority interest expense was $0.3 millionhigher for the three months ended September 30, 2004 than the $1.4million for the three months ended September 30, 2003.

Nine Months Ended September 30, 2004 Compared to theNine Months Ended September 30, 2003

Net sales for the ninemonths ended September 30, 2004 and September 30, 2003 may be comparedas follows:

|                                       |  |                  |         |                   |  |         |         |                                               |  |                           |      |          |  |        |     |         |  |        |      |          |  |        |      |          |  |  |
|---------------------------------------|--|------------------|---------|-------------------|--|---------|---------|-----------------------------------------------|--|---------------------------|------|----------|--|--------|-----|---------|--|--------|------|----------|--|--------|------|----------|--|--|
|                                  |  | Successor        |         | Predecessor       |  |    |         | Attributableto Changesin the FollowingFactors |
|                                  |  | Nine MonthsEnded |         |
| (dollars inmillions)                  |  | September30,2004 |         | September 30,2003 |  | %Change |         | CurrencyTranslation                           |  | Acquisitions/Divestitures |      | Organic  |
| Industrial& InstitutionalServices |  | $                | 1,036.7 |              |  | $       | 954.6   |                                          |  |                      | 8.6  | %   |  |   | 4.4 | %  |  |   | (0.2 | )%  |  |   | 4.4  | %   |
| EnergyServices                        |  |             | 592.2   |              |  |    | 531.1   |                                          |  |                      | 11.5 | %   |  |   | 3.8 | %  |  |   | (0.9 | )%  |  |   | 8.6  | %   |
| PaperServices                         |  |             | 490.0   |              |  |    | 463.2   |                                          |  |                      | 5.8  | %   |  |   | 3.7 | %  |  |   | 1.3  | %   |  |   | 0.8  | %   |
| Other                                 |  |             | 109.0   |              |  |    | 115.2   |                                          |  |                      | (5.4 | )%  |  |   | 3.8 | %  |  |   | (4.8 | )%  |  |   | (4.4 | )%  |
| Netsales                              |  | $                | 2,227.9 |              |  | $       | 2,064.1 |                                          |  |                      | 7.9  | %   |  |   | 4.1 | %  |  |   | (0.3 | )%  |  |   | 4.1  | %   |
|                                       |

NetSales.    Net sales for the nine months ended September 30, 2004were $2,227.9 million, a 7.9% increase over the $2,064.1 millionreported for the nine months ended September 30, 2003. After adjustingfor the favorable effects of changes in foreign currency translationrates and the net impact of acquisitions and divestitures, net saleswere up 4.1%. The Energy Services division reported organicgrowth in sales of 8.6% over last year, with double-digitimprovements posted by both of its upstream business groups. Led by itsglobal mining business, the Industrial and Institutional Servicesdivision reported a 4.4% organic increase in sales. PaperServices division sales were nearly flat on an organic basis comparedto a year ago, as the lingering effect of price and contractconcessions in North America in 2003 were offset by new business gainedand good growth in the Pacific region, Europe and Latin America. Theunfavorable organic growth in "other" ismainly due to the decision made last year to reduce certain low-marginbusiness with a major customer, slightly offset by organic growth inIndia. The effect of this decision also reduced the organic growth oftotal net sales by 0.4%.

30

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|              |                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------|
| Item2.  | Management's Discussion and Analysis ofFinancial Condition and Results of Operations  (Continued) |

Gross Profit.    Gross profit,defined as the difference between net sales and costs of products sold,of $1,099.5 million for the nine months ended September 30, 2004increased by $28.2 million, or 2.6%, over the $1,071.3 millionreported for the nine months ended September 30, 2003. Adjusted for thefavorable effect of changes in foreign currency translation rates andthe net unfavorable impact of acquisitions and divestitures, grossprofit decreased by $9.4 million, or 0.9%. Expensing a portionof the adjustment made to increase inventories to fair value at thedate of the Acquisition unfavorably impacted gross profit by $14.5million. Other significant factors contributing to the organic changein gross profit were the aforementioned increase in sales volumes,which favorably impacted gross profit by approximately $43.4 million,but which was partly offset by margin erosion mainly due to product mix($25.0 million), raw material cost increases ($6.3 million) and freightincreases ($9.0 million). Gross profit margin for the nine months endedSeptember 30, 2004 declined to 49.4% from 51.9% for thesame period last year. The impact of the expensing of a portion of theadjustment made to increase inventories to fair value at the date ofAcquisition accounted for approximately one-fourth of this decline.

Selling, Administrative, and ResearchExpenses.    Selling, administrative, and research expenses forthe nine months ended September 30, 2004 of $789.5 million decreased by$3.1 million, or 0.4%, from the same period last year. Adjustedfor the unfavorable effects of changes in foreign currency translationrates, selling, administrative, and research expenses decreased by$30.7 million, or 3.9%, primarily due to spending reductionsinitiatives launched in the fourth quarter 2003 and tightened spendingcontrols in 2004. The net favorable impact from acquisitions anddivestitures also contributed $1.1 million to the change.

Impairment of Goodwill.    The impairment of goodwill of$244.4 million for the nine months ended September 30, 2003 resultedfrom the Predecessor's evaluation of its goodwill, based on thepurchase price for the Acquisition and the fair value of its assets andliabilities.

Amortization of IntangibleAssets.    Amortization of intangible assets was $73.0 millionand $61.8 million for the nine months ended September 30, 2004 and2003, respectively. The increase resulted from higher amortization ofintangible assets as a result of the Acquisition.

In-ProcessResearch and Development.    In-process research and developmentwas a one-time charge of $122.3 million recorded during the nine monthsended September 30, 2004, as a result of preliminary purchaseaccounting entries related to the Acquisition. The value of purchasedIPR&D was comprised of five ongoing development projects at thedate of the Acquisition. Purchased IPR&D was derived by assigningvalues to those projects identified by management as having economicvalue, but that had not yet reached technological feasibility and hadno alternative future use.

Business OptimizationExpenses.    Business optimization expenses of $15.2 million forthe nine months ended September 30, 2003 were mostly attributable tothe Predecessor's sales and marketing business realignmentlaunched in 2002.

Other Income (Expense),Net.    Other income (expense), net was an expense of $6.5million and $13.0 million for the nine months ended September 30, 2004and 2003, respectively. This $6.5 million decrease is primarilyattributable to a $10.9 million charge in 2003 resulting from thediscontinuance of hedge accounting for an interest rate swap and a $5.3million loss on the sale of the Predecessor's South Africansubsidiary in 2003, partially offset by unfavorable changes infranchise taxes of $3.3 million. In addition, Suez management feesexpensed by the Predecessor for the nine months ended September 30,2003 were $2.3 million, whereas Sponsor monitoring fees for the ninemonths ended September 30, 2004 were $8.4 million. Lower franchisetaxes partly offset these unfavorable changes.

Net InterestExpense.    Net interest expense, defined as the combination ofinterest income and interest expense, of $152.0 million for the ninemonths ended September 30, 2004 increased by $128.2 million from the$23.8 million reported for the nine months ended September 30, 2003.The increase is due primarily to the interest charges incurred on thenew debt used to finance the Acquisition.

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|              |                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------|
| Item2.  | Management's Discussion and Analysis ofFinancial Condition and Results of Operations  (Continued) |

Effective Tax Rate.    Theeffective tax rate, excluding the impact of the aforementioned chargefor purchased IPR&D, was 59.6% for the nine months endedSeptember 30, 2004. The effective tax rate for the nine months endedSeptember 30, 2003, excluding the impact of the goodwill impairmentcharge and the sale of the Predecessor's South Africansubsidiary, was 39.2%. The effective tax rate in 2004 issignificantly higher than 2003 mostly because of the one-time impact ofcreating a tax-efficient method of repatriating earnings from certainoffshore subsidiaries and the incremental U.S. taxes on therepatriation of other non-U.S. earnings.

Minority InterestExpense.    Minority interest expense was $0.8 million lowerthan the $4.4 million for the nine months ended September 30, 2003, duemostly to the sale of the Predecessor's South African subsidiaryin 2003.

Liquidity and Capital Resources

Operatingactivities.    Historically, the Company's main source ofliquidity has been its solid cash flow generated by operatingactivities. For the nine months ended September 30, 2004, cash providedby operating activities was $256.2 million, a $6.5 million decreasefrom the same period last year. This decrease primarily resulted fromhigher interest payments in 2004, due to higher debt from theAcquisition, partly offset by lower working capital requirements,reflecting efforts to more effectively manage working capital.

Investing activities.    Cash used for investingactivities was $37.5 million for the nine months ended September 30,2004. Net property additions of $57.7 million were partly offset by a$25.3 million purchase price adjustment related to the Acquisition.Approximately 40% of the capital spending was attributable tothe Company's implementation of a common SAP platform in NorthAmerica and Europe.

Net property additions of $66.9 millionaccounted for slightly more than half of the $127.9 million of cashused for investing activities by the Predecessor during the nine monthsended September 30, 2003. The purchase of the remaining 60% ofthe common shares of Oekophil AG and the purchase of a UK company froma related Suez company accounted for most of the $25.6 million net useof cash for business purchases/sales. Other investing activities of$35.4 million were mainly comprised of additional advances to a formerrelated party and an investment in a former affiliated company.

Financing activities.    Net cash used for financingactivities totaled $253.4 million during the nine months endedSeptember 30, 2004. This was primarily comprised of a net repayment ofborrowings.

During the nine months ended September 30, 2004, theCompany repaid $287.1 million of term loans and $15.0 million ofrevolving credit facility debt. These debt repayments included $99.1million of mandatory amortization and $203.0 million of discretionarydebt repayments.

In June 2004, the Company entered into athree-year accounts receivable securitization facility with acommercial paper conduit sponsored by one of the lenders under theCompany's senior credit facilities. The facility provides up to$100 million in funding.

Of the $287.1 million of term loan debtrepayments, $92.0 million was funded from the initial proceeds fromborrowings under the facility. As of September 30, 2004, theoutstanding balance for the facility was $47.6 million.

TheCompany received $11.0 million of additional capital during the ninemonths ended September 30, 2004. This was primarily the direct resultof $9.3 million of additional equity received by the Company'sultimate parent company, Nalco LLC, and was comprised of an equityinvestment of $1.2 million from Dr. William H. Joyce, the

Company's Chairman and Chief Executive Officer, and $8.1million in proceeds from the sale of equity interests to certainofficers and key employees under the Nalco LLC 2004 Unit Plan, anequity 

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|              |                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------|
| Item2.  | Management's Discussion and Analysis ofFinancial Condition and Results of Operations  (Continued) |

compensation plan. Using proceeds from theissuance of the senior discount notes it issued in January 2004, theCompany's direct parent company, Nalco Finance Holdings LLC,contributed an additional $1.7 million of capital to the Company.

During the nine months ended September 30, 2003, net cash used forfinancing activities by the Predecessor totaled $106.8 million,reflecting cash dividends of $29.0 million, net repayments of debt of$106.8 million and capital contributions of $31.6 million from NalcoInternational SAS, a former related party owned by Suez.

Priorto the Transactions, the Predecessor obtained short-term financing fromSuez Finance LP, a finance company operated by Suez to provide fundingto its North American subsidiaries, rather than from externalsources.

As a result of the Transactions, the Company is highlyleveraged. Its liquidity requirements are significant, primarily due todebt service requirements as well as research and development andcapital investment. Its primary source of liquidity will continue to becash flow generated from operations, but the Company also hasavailability under a $250 million revolving credit facility, subject tocertain conditions. This revolving credit facility is part of theCompany's senior credit facilities. The revolving credit isavailable for general corporate purposes, subject to certainconditions, and matures in November 2009. The Company's seniorcredit facilities also include a $300 million six-year term loan Afacility (which includes an €88.0 million tranche) whichmatures in November 2009 and a $1,300 million seven-year term loan Bfacility which matures in November 2010. Borrowings under the seniorcredit facilities bear interest at a floating base rate plus anapplicable margin. The initial applicable margin for borrowings underthe revolving credit facility and the term loan A facility is LIBORplus 2.50% and for borrowings under the term loan B facility isLIBOR plus 2.50%.

In addition to paying interest onoutstanding principal under the senior credit facilities, we arerequired to pay a commitment fee to the lenders under the revolvingcredit facility in respect of the unutilized commitments at a rateequal to 0.50%. We also pay customary letter of credit fees.

The term loan A facility amortizes each year in quarterly amounts ata rate of 5% per annum in year one, 10% per annum in yeartwo, 15% per annum in year three, 20% per annum in yearfour and 25% per annum in each of years five and nine.

The term loan B facility amortizes each year in an amount equal to1% per annum in equal quarterly installments for the first sixyears and nine months, with the remaining amount payable on the datethat is seven years from the date of the closing of the senior creditfacilities. Principal amounts outstanding under the revolving creditfacility will be due and payable in full at maturity, six years fromthe date of the closing of the senior credit facilities.

Thesenior credit facilities contain a number of covenants that, amongother things, restrict, subject to certain exceptions, our ability andour subsidiaries' ability, including Nalco Company, to sellassets, incur additional indebtedness or issue preferred stock, repayother indebtedness (including the notes), pay dividends anddistributions or repurchase our capital stock, create liens on assets,make investments, loans or advances, make certain acquisitions, engagein mergers or consolidations, enter into sale and leasebacktransactions, engage in certain transactions with affiliates, amendcertain material agreements governing our indebtedness, including thenotes, change the business conducted by us and our subsidiaries(including Nalco Company) and enter into hedging agreements. Inaddition, the senior credit facilities require Nalco Company tomaintain the following financial covenants: a maximum total leverageratio, a minimum interest coverage ratio and a maximum capitalexpenditures limitation. The Company was in compliance with allcovenants at September 30, 2004.

33

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|              |                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------|
| Item2.  | Management's Discussion and Analysis ofFinancial Condition and Results of Operations  (Continued) |

The indentures governing the senior notesand senior subordinated notes limit our ability and the ability of ourrestricted subsidiaries to:

|              |                               |
|--------------|-------------------------------|
| •  | incuradditional indebtedness; |

|              |                                                                             |
|--------------|-----------------------------------------------------------------------------|
| •  | pay dividendson or make other distributions or repurchase our capitalstock; |

|              |                          |
|--------------|--------------------------|
| •  | make certaininvestments; |

|              |                                                          |
|--------------|----------------------------------------------------------|
| •  | enter into certain typesof transactions with affiliates; |

|              |                                                                       |
|--------------|-----------------------------------------------------------------------|
| •  | limitdividends or other payments by our restricted subsidiaries tous; |

|              |                                                  |
|--------------|--------------------------------------------------|
| •  | use assets as security in othertransactions; and |

|              |                                                           |
|--------------|-----------------------------------------------------------|
| •  | sell certain assetsor merge with or into other companies. |

Subject to certainexceptions, the indentures governing the senior notes and seniorsubordinated notes permit the Company and its restricted subsidiariesto incur additional indebtedness, including secured indebtedness.

Certain of our non-U.S. subsidiaries have lines of credit to supportlocal requirements. As of September 30, 2004, the outstanding balanceunder these local lines of credit was approximately $14.4 million.Certain of these lines of credit are equally and ratably secured withobligations under our senior credit facilities.

We believe thatfunds generated from operations and our borrowing capacity will beadequate to fund these requirements. Our ability to fund these itemsand to reduce debt may be affected by general economic, financial,competitive, legislative and regulatory factors, and the cost oflitigation claims, among other things.

We believe that ourfinancial position and financing structure will provide flexibility inworldwide financing activities and permit it to respond to changingconditions in credit markets.

Adjusted EBITDA

Our new senior credit facility and our indentures contain a numberof significant covenants as described above. Adjusted EBITDA is used todetermine our compliance with many of these covenants.

AdjustedEBITDA is defined as EBITDA adjusted to exclude unusual items and otheradjustments permitted in calculating covenant compliance under theindentures governing the notes and our senior credit facility. Webelieve that the inclusion of supplementary adjustments to EBITDAapplied in presenting Adjusted EBITDA are appropriate to provideadditional information to investors to demonstrate compliance with ourfinancing covenants.

Any breach of covenants in our new seniorcredit agreement that are tied to ratios based on Adjusted EBITDA couldresult in a default under that agreement and the lenders could elect todeclare all amounts borrowed due and payable. Any such accelerationwould also result in a default under our indentures. Additionally,under our debt agreements, our ability to engage in activities such asincurring additional indebtedness, making investments and payingdividends is also tied to ratios based on Adjusted EBITDA.

34

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|              |                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------|
| Item2.  | Management's Discussion and Analysis ofFinancial Condition and Results of Operations  (Continued) |

Adjusted EBITDA is calculated asfollows:

|                                  |  |                               |         |                              |  |                                  |       |                                  |  |        |         |         |  |        |        |         |  |  |
|----------------------------------|--|-------------------------------|---------|------------------------------|--|----------------------------------|-------|----------------------------------|--|--------|---------|---------|--|--------|--------|---------|--|--|
|                             |  | Successor                     |         | Predecessor                  |  | Successor                        |       | Predecessor                      |
|                             |  | QuarterEndedSeptember30, 2004 |         | QuarterEndedSeptember30,2003 |  | Nine MonthsEndedSeptember30,2004 |       | Nine MonthsEndedSeptember30,2003 |
| Net income(loss)                 |  | $                             | 12.4    |                         |  | $                                | 33.7  |                             |  | $      | (94.2   | )  |  | $      | (154.0 | )  |
| Interest,net                     |  |                          | 51.4    |                         |  |                             | 8.6   |                             |  |   | 152.0   |    |  |   | 23.8   |    |
| Incometaxprovision               |  |                          | 27.2    |                         |  |                             | 29.5  |                             |  |   | 46.8    |    |  |   | 70.1   |    |
| Depreciation                     |  |                          | 23.8    |                         |  |                             | 30.9  |                             |  |   | 80.7    |    |  |   | 91.6   |    |
| Amortization                     |  |                          | 23.9    |                         |  |                             | 20.5  |                             |  |   | 73.0    |    |  |   | 61.8   |    |
| EBITDA                           |  | $                             | 138.7   |                         |  | $                                | 123.2 |                             |  | $      | 258.3   |    |  | $      | 93.3   |    |
| Non-cashcharges(1)               |  |                          | 14.5    |                         |  |                             | 4.7   |                             |  |   | 167.5   |    |  |   | 266.8  |    |
| Businessoptimization expenses(2) |  |                          | — |                         |  |                             | 5.5   |                             |  |   | — |    |  |   | 15.2   |    |
| Unusualitems(3)                  |  |                          | 2.2     |                         |  |                             | 20.6  |                             |  |   | 6.7     |    |  |   | 29.0   |    |
| Otheradjustments(4)              |  |                          | 1.9     |                         |  |                             | (2.8  | )                           |  |   | 5.6     |    |  |   | (5.0   | )  |
| Costsavings(5)                   |  |                          | — |                         |  |                             | 7.5   |                             |  |   | — |    |  |   | 22.5   |    |
| AdjustedEBITDA                   |  | $                             | 157.3   |                         |  | $                                | 158.7 |                             |  | $      | 438.1   |    |  | $      | 421.8  |    |
|                                  |

|  |
|--|
|  |  |
|  |

|     |                                                             |
|-----|-------------------------------------------------------------|
| (1) | Non-cashcharges are further detailed on the followingtable: |

|                                                |  |                              |         |                              |  |                                  |         |                                  |  |        |         |        |  |        |         |        |  |  |
|------------------------------------------------|--|------------------------------|---------|------------------------------|--|----------------------------------|---------|----------------------------------|--|--------|---------|--------|--|--------|---------|--------|--|--|
|                                           |  | Successor                    |         | Predecessor                  |  | Successor                        |         | Predecessor                      |
|                                           |  | QuarterEndedSeptember30,2004 |         | QuarterEndedSeptember30,2003 |  | Nine MonthsEndedSeptember30,2004 |         | Nine MonthsEndedSeptember30,2003 |
| Impairment of goodwill                         |  | $                            | — |                         |  | $                                | — |                             |  | $      | — |   |  | $      | 244.4   |   |
| In-process research anddevelopment             |  |                         | — |                         |  |                             | — |                             |  |   | 122.3   |   |  |   | — |   |
| Inventorystep-up                               |  |                         | — |                         |  |                             | — |                             |  |   | 14.5    |   |  |   | — |   |
| Assetwrite-offs                                |  |                         | — |                         |  |                             | 0.6     |                             |  |   | — |   |  |   | 4.5     |   |
| Profitsharing expense and 401(k) funded bySuez |  |                         | 8.0     |                         |  |                             | 5.7     |                             |  |   | 24.0    |   |  |   | 17.4    |   |
| Other                                          |  |                         | 6.5     |                         |  |                             | 1.6     |                             |  |   | 6.7     |   |  |   | 0.5     |   |
| Non-cashcharges                                |  | $                            | 14.5    |                         |  | $                                | 4.7     |                             |  | $      | 167.5   |   |  | $      | 266.8   |   |
|                                                |

Impairmentof goodwill

Goodwill impairment of $244.4 million was recordedby the Predecessor in accordance with SFAS No. 142, Goodwill andOther Intangible Assets. Goodwill was evaluated for impairmentbased on the purchase price for the Predecessor.

In-process Research and Development

In-processresearch and development was a one time charge of $122.3 millionrecorded during the nine months ended September 30, 2004, as a resultof preliminary purchase accounting entries related to theAcquisition.

Inventory Step-Up

As a resultof purchase accounting for the Acquisition, we wrote up our inventoryto fair value and subsequently charged the write up to cost of sales asthe inventory was sold.

35

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|              |                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------|
| Item2.  | Management's Discussion and Analysis ofFinancial Condition and Results of Operations  (Continued) |

Profit Sharing and 401(k)Expense Funded by Suez

In conjunction with the Acquisition, weentered into an agreement with Suez whereby Suez will reimburse us forcertain profit-sharing and 401(k) matching contributions made by us tothe Profit-Sharing Trust.

Other

Othernon-cash charges include the non-cash impact on earnings of our equityinvestments and minority interests. Successor non-cash charges alsoincludes the non-cash portion of rent expense under the sublease thatwe entered into with Suez in conjunction with the Acquisition.

|           |                                                                                                                                                                                                                                                                                                                                           |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)  | Business optimization expenses for2003 includes cost associated with the integration of the Nalco/ExxonEnergy Chemicals, L.P. (Nalco/Exxon) joint venture and theimplementation of global cost reduction programs in the sales,marketing, manufacturing and support services operations. See notes 2and 9 to Item 1 for more information. |

|           |                                                           |
|-----------|-----------------------------------------------------------|
| (3)  | Unusual items are further detailed onthe following table: |

|                                            |  |                              |         |                              |  |                                  |         |                                  |  |        |         |        |  |        |      |        |  |  |
|--------------------------------------------|--|------------------------------|---------|------------------------------|--|----------------------------------|---------|----------------------------------|--|--------|---------|--------|--|--------|------|--------|--|--|
|                                       |  | Successor                    |         | Predecessor                  |  | Successor                        |         | Predecessor                      |
|                                       |  | QuarterEndedSeptember30,2004 |         | QuarterEndedSeptember30,2003 |  | Nine MonthsEndedSeptember30,2004 |         | Nine MonthsEndedSeptember30,2003 |
| Pension and OPEB settlement andcurtailment |  | $                            | — |                         |  | $                                | — |                             |  | $      | — |   |  | $      | 1.6  |   |
| Loss (gain) on sales, net ofexpenses       |  |                         | — |                         |  |                             | 11.4    |                             |  |   | — |   |  |   | 11.3 |   |
| Otherunusual items(a)                      |  |                         | 2.2     |                         |  |                             | 8.6     |                             |  |   | 6.7     |   |  |   | 14.2 |   |
| Suezmanagement fees,net                    |  |                         | — |                         |  |                             | 0.6     |                             |  |   | — |   |  |   | 1.9  |   |
|                                       |  | $                            | 2.2     |                         |  | $                                | 20.6    |                             |  | $      | 6.7     |   |  | $      | 29.0 |   |
|                                            |

|  |
|--|
|  |  |  |
|  |

|  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (a) | In2003, our results were impacted by the effects of certain other unusualitems including a termination charge for the settlement of an interestrate swap; executive severance and relocation expenses; legal andenvironmental expenses that mainly related to events that occurredprior to Suez's 1999 acquisition of Nalco Chemical Company andlitigation costs not covered by our excess liability insurance policy;and consultancy expenses incurred on behalf of Suez. Our results for2004 were impacted by the effects of certain other unusual items,including expenses associated with the registration of publiclytradable senior notes and senior subordinated notes that were exchangedfor the privately placed notes issued in connection with theTransactions; costs related to changing the name of our operatingcompany from Ondeo Nalco Company to Nalco Company; and otherTransaction-relatedexpenses. |

|           |                                                                                                                                                                                                                                                                                                                                  |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (4)  | We are required tomake adjustments to EBITDA for monitoring fees paid to the Sponsors,franchise taxes, 401(k) matching contributions and other pro formaadjustments. These pro forma adjustments include purchase accountingadjustments for pensions and the incremental rent expense we will incurunder our sublease with Suez. |

|           |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (5)  | Ourfinancing agreements also permit us to adjust EBITDA on a pro formabasis for certain cost savings that we expect to achieve. We haveinitiated a comprehensive cost reduction plan that was expected toyield annual savings of at least $30 million on a proforma basis in2003. We implemented this plan immediately upon consummation of theAcquisition. The remainder of our cost reduction plan is expected torealize incremental efficiencies through work process redesign andother targeted cost improvement programs, which address inefficienciesin our administrative and overhead functions, as well as other supportfunctions around the world. |

36

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|              |                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------|
| Item2.  | Management's Discussion and Analysis ofFinancial Condition and Results of Operations  (Continued) |

Our covenant levels and ratios for thefour quarters ended September 30, 2004 are as follows:

|                                                                                                           |  |                                 |        |        |  |        |        |        |  |  |
|-----------------------------------------------------------------------------------------------------------|--|---------------------------------|--------|--------|--|--------|--------|--------|--|--|
|                                                                                                      |  | CovenantLevelatSeptember30,2004 |        | Ratios |
| **Seniorcredit facility**(1)                                                                              |  |                            |   |   |  |   |   |   |
| Minimum AdjustedEBITDA to cash interestratio                                                              |  |                            | 1.65x  |   |  |   | 3.04x  |   |
| Maximum netdebt to Adjusted EBITDAratio                                                                   |  |                            | 6.75x  |   |  |   | 5.18x  |   |
| **Indentures**(2)                                                                                         |  |                            |   |   |  |   |   |   |
| Minimum AdjustedEBITDA to fixed charge ratio required to incur additional debt pursuantto ratioprovisions |  |                            | 2.00x  |   |  |   | 3.04x  |   |
|                                                                                                           |

|  |
|--|
|  |  |  |
|  |

|  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (1) | Oursenior credit facility requires us to maintain an Adjusted EBITDA tocash interest ratio starting at a minimum of 1.65x and a net debt toAdjusted EBITDA ratio starting at a maximum of 6.75x, in each case forthe most recent four quarter period. Failure to satisfy these ratiorequirements would constitute a default under the senior creditagreement. If our lenders failed to waive any such default, ourrepayment obligations under the senior credit agreement could beaccelerated, which would also constitute a default under ourindentures. |

|  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (2) | Our abilityto incur additional debt and make certain restricted payments under ourindentures, subject to specified exceptions, is tied to an AdjustedEBITDA to fixed charge ratio of at least 2.0 to 1, except that we mayincur certain debt and make certain restricted payments and certainpermitted investments without regard to the ratio, such as up to anaggregate principal amount of $1,950 million (including $1,321.5million that was outstanding under our term loan facilities as ofSeptember 30, 2004) and investments in similar business and otherinvestments equal to 6% of Nalco Holdings LLC consolidatedassets. |

Nalco Company entered into a receivables facilityon June 25, 2004 that provides up to $100 million in funding from acommercial paper conduit sponsored by JPMorgan Chase Bank, one of thelenders under Nalco Company's senior credit facilities, based onavailability of eligible receivables and satisfaction of othercustomary conditions.

This facility is treated as a generalfinancing agreement resulting in the funding and related receivablesbeing shown as liabilities and assets, respectively, on ourconsolidated balance sheet and the costs associated with thereceivables facility being recorded as interest expense.

Item3.    Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the Company's exposuresto market risk since December 31, 2003.

Item 4.    Controlsand Procedures

|           |                                                  |
|-----------|--------------------------------------------------|
| (a)  | Evaluation ofdisclosure controls and procedures. |

TheCompany's chief executive officer and chief financial officer,after evaluating the effectiveness of the Company's"disclosure controls and procedures" (asdefined in the Securities Exchange Act of 1934 Rules 13a-15(e) and15d-15(e)) as of the end of the period, have concluded that theCompany's disclosure controls and procedures were adequate anddesigned to ensure that material information relating to the Companyand its consolidated subsidiaries would be made known to them by otherswithin those entities as appropriate to allow timely decisionsregarding required disclosures.

37

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|              |                                                                                                   |
|--------------|---------------------------------------------------------------------------------------------------|
| Item2.  | Management's Discussion and Analysis ofFinancial Condition and Results of Operations  (Continued) |

|           |                                                       |
|-----------|-------------------------------------------------------|
| (b)  | Changes ininternal controls over financial reporting. |

There wereno changes in the Company's internal controls over financialreporting that occurred during the most recent fiscal quarter that havematerially affected, or are reasonably likely to affect, theCompany's internal controls over financialreporting.

38

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PARTII.    OTHER INFORMATION

Item 1.    Legal Proceedings

Various claims, lawsuits and administrative proceedings are pendingor threatened against the Company and its subsidiaries, arising fromthe ordinary course of business with respect to commercial,intellectual property, product liability, employee and environmentalmatters. Historically these matters have not had a material impact onthe consolidated financial position of the Company. However, theCompany cannot predict the outcome of any litigation or the potentialfor future litigation.

The Company has been named as apotentially responsible party (PRP) by the Environmental ProtectionAgency or state enforcement agencies at three waste sites where somefinancial contribution is or may be required. These agencies have alsoidentified many other parties who may be responsible for clean up costsat these waste disposal sites. The Company's financialcontribution to remediate these sites is expected to be minor. Therehas been no significant financial impact on the Company up to thepresent, nor is it anticipated that there will be in the future, as aresult of these matters. The Company has made and will continue to makeprovisions for these costs if the Company's liability becomesprobable and when costs can be reasonably estimated. TheCompany's undiscounted reserves for known environmental clean upcosts were $2.0 million at September 30, 2004.

Theseenvironmental reserves represent management's current estimate ofits proportional clean-up costs and are based upon negotiation andagreement with enforcement agencies, its previous experience withrespect to clean-up activities, a detailed review by the Company ofknown conditions, and information about other PRPs. They are notreduced by any possible recoveries from insurance companies or otherPRPs not specifically identified. Although management cannot determinewhether or not a material effect on future operations is reasonablylikely to occur, given the evolving nature of environmentalregulations, it believes that the recorded reserve levels areappropriate estimates of the potential liability. Although settlementwill require future cash outlays, it is not expected that such outlayswill materially impact the Company's liquidity position.Expenditures for the three months and nine months ended September 30,2004, relating to environmental compliance and clean up activities werenot significant.

The Company has been named as a defendant inlawsuits based on claimed involvement in the supply of allegedlydefective or hazardous materials. The plaintiffs in these cases seekdamages for alleged personal injury or potential injury resulting fromexposure to our products or other chemicals. These matters have had ade minimis impact on the Company's business historicallyand the Company does not anticipate these matters to present anymaterial risk to the Company's business in the future.Notwithstanding, the Company cannot predict the outcome of any suchlawsuits or the involvement the Company might have in these matters inthe future.

The Company has received subpoenas from the U.S.Department of Justice for documents and testimony relating to itsstorage of claimed hazardous materials and the claimed leakage ofwastewater at its plant in Garyville, Louisiana. No charges orindictments have been filed, but the outcome of this investigation isunknown to the Company.

In the ordinary course of its business,the Company is also a party to a number of lawsuits and is subject tovarious claims relating to trademarks, employee matters, contracts andchemicals, the outcome of which, in the opinion of management, shouldnot have a material effect on the consolidated financial position ofthe Company. However, we cannot predict the outcome of any litigationor the potential for future litigation. The Company maintains accrualsand/or has insurance in those instances where there is reason tobelieve that significant costs might be incurred.

39

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Item 6.    Exhibits

|              |                                                                                                                                 |
|--------------|---------------------------------------------------------------------------------------------------------------------------------|
| (31.1)  | Certification of Chief ExecutiveOfficer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the SecuritiesExchange Act, as amended |

|              |                                                                                                                                 |
|--------------|---------------------------------------------------------------------------------------------------------------------------------|
| (31.2)  | Certification of Chief Financial Officer pursuantto Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, asamended |

|             |                                                                                                                                                                            |
|-------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (32)   | Certification of ChiefExecutive Officer and Chief Financial Officer Pursuant to 18 U.S.C.Section 1350, as adopted pursuant to Section 906 of the Sarbanes-OxleyAct of 2002 |

40

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SIGNATURE

The Company has duly caused this report to be signed on itsbehalf by the undersigned thereunto duly authorized.

NALCO HOLDINGS LLC

/s/ BRADLEY J.BELL

|  |
|--|
|  |  |  |
|  |

Name:Bradley J. Bell

|  |              |                                                     |
|--|--------------|-----------------------------------------------------|
|  | Title:  | Executive Vice President and Chief FinancialOfficer |

Dated: November 15,2004

41

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