UNITEDSTATES SECURITIES AND EXCHANGE COMMISSION Washington, DC20549

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FORM10-Q

(Mark One)

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|   | QUARTERLYREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934 |

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|--------|----------------------------------------------|
|   | For the quarterly period ended March 31,2005 |

or

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|   | TRANSITIONREPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934 |

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|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | For the transition period from                 to                . |

Commission File No.333-115560-15

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NALCOHOLDINGS LLC

(Exact name of registrant asspecified in its charter)

|                                                               |  |                                        |  |  |  |  |
|---------------------------------------------------------------|--|----------------------------------------|--|--|--|--|
| Delaware                                                      |  | 73-1683500                             |
| (Stateor other jurisdiction of Incorporation or Organization) |  | (I.R.S.Employer Identification Number) |
|                                                               |

1601West Diehl Road Naperville, IL 60563-1198 (630) 305-1000

(Address, Including Zip Code, and Telephone Number,Including Area Code, of Registrant's Principal ExecutiveOffices)

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

Indicate by check mark whether the registrant is an acceleratedfiler (as defined in Rule 12b-2 of the ExchangeAct.)    Yes       No   

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QUARTERLY REPORTON FORM 10-Q NALCO HOLDINGS LLC Quarter Ended March 31,2005

TABLE OF CONTENTS

|                                                        |  |                                                                                                                          |    |        |        |        |  |  |  |  |
|--------------------------------------------------------|--|--------------------------------------------------------------------------------------------------------------------------|----|--------|--------|--------|--|--|--|--|
| **PartI.    FinancialInformation** |
| Item1.                                                 |  | FinancialStatements (Unaudited)                                                                                          |    |   |   |   |
|                                                   |  | CondensedConsolidated Balance Sheets – March 31, 2005 and December 31,2004                                         |    |   | 2      |   |
|                                                   |  | Condensed ConsolidatedStatements of Operations – Three months ended     March31, 2005 and 2004 |    |   | 3      |   |
|                                                   |  | CondensedConsolidated Statements of Cash Flows – Three months ended    March 31, 2005 and 2004 |    |   | 4      |   |
|                                                   |  | Notes to Condensed Consolidated Financial Statements– March 31, 2005                                               |    |   | 5      |   |
| Item2.                                                 |  | Management's Discussion and Analysis of FinancialCondition and Results of     Operations             |    |   | 19     |   |
| Item 3.                                                |  | Quantitative and Qualitative Disclosures AboutMarket Risk                                                                |    |   | 28     |   |
| Item 4.                                                |  | Controls andProcedures                                                                                                   |    |   | 28     |   |
| **PartII.    Other Information**   |
| Item6.                                                 |  | Exhibits                                                                                                                 |    |   | 29     |   |
| **Signature**                                          |  |                                                                                                                     | 30 |   |
|                                                        |

1

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PART I. FINANCIALINFORMATION

Item 1.    Financial Statements (Unaudited)

Nalco Holdings LLC and Subsidiaries Condensed ConsolidatedBalance Sheets(dollars inmillions)

|                                                                       |  |              |         |                 |  |        |         |        |  |  |
|-----------------------------------------------------------------------|--|--------------|---------|-----------------|--|--------|---------|--------|--|--|
|                                                                  |  | (Unaudited)  |         |            |
|                                                                  |  | March31,2005 |         | December31,2004 |
| **Assets**                                                            |  |         |    |            |  |   |    |   |
| Currentassets:                                                        |  |         |    |            |  |   |    |   |
| Cash andcashequivalents                                               |  | $            | 34.4    |            |  | $      | 33.2    |   |
| Accountsreceivable, less allowances of $22.6 in 2005 and $21.1 in2004 |  |         | 587.5   |            |  |   | 594.2   |   |
| Inventories:                                                          |  |         |    |            |  |   |    |   |
| Finishedproducts                                                      |  |         | 273.7   |            |  |   | 245.4   |   |
| Materialsand work inprocess                                           |  |         | 78.8    |            |  |   | 68.1    |   |
|                                                                  |  |         | 352.5   |            |  |   | 313.5   |   |
| Prepaidexpenses, taxes and other currentassets                        |  |         | 75.5    |            |  |   | 90.1    |   |
| Totalcurrentassets                                                    |  |         | 1,049.9 |            |  |   | 1,031.0 |   |
|                                                                  |  |         |    |            |  |   |    |   |
| Property,plant, and equipment,net                                     |  |         | 815.9   |            |  |   | 847.3   |   |
| Intangibleassets:                                                     |  |         |    |            |  |   |    |   |
| Goodwill                                                              |  |         | 2,336.1 |            |  |   | 2,368.3 |   |
| Otherintangibles,net                                                  |  |         | 1,297.9 |            |  |   | 1,323.6 |   |
| Otherassets                                                           |  |         | 358.3   |            |  |   | 363.5   |   |
| Totalassets                                                           |  | $            | 5,858.1 |            |  | $      | 5,933.7 |   |
|                                                                  |  |         |    |            |  |   |    |   |
| **Liabilitiesand unitholder'sequity**                                 |  |         |    |            |  |   |    |   |
| Currentliabilities:                                                   |  |         |    |            |  |   |    |   |
| Accountspayable                                                       |  | $            | 260.4   |            |  | $      | 261.9   |   |
| Short termdebt                                                        |  |         | 25.4    |            |  |   | 17.7    |   |
| Other currentliabilities                                              |  |         | 266.4   |            |  |   | 311.7   |   |
| Totalcurrentliabilities                                               |  |         | 552.2   |            |  |   | 591.3   |   |
|                                                                  |  |         |    |            |  |   |    |   |
| Otherliabilities:                                                     |  |         |    |            |  |   |    |   |
| Long-termdebt                                                         |  |         | 3,070.2 |            |  |   | 3,100.6 |   |
| Deferred incometaxes                                                  |  |         | 495.3   |            |  |   | 501.5   |   |
| Accrued pensionbenefits                                               |  |         | 418.9   |            |  |   | 411.7   |   |
| Otherliabilities                                                      |  |         | 296.4   |            |  |   | 296.8   |   |
|                                                                  |  |         |    |            |  |   |    |   |
| Minorityinterest                                                      |  |         | 11.9    |            |  |   | 14.1    |   |
| Unitholder'sequity                                                    |  |         | 1,013.2 |            |  |   | 1,017.7 |   |
| Totalliabilities and unitholder'sequity                               |  | $            | 5,858.1 |            |  | $      | 5,933.7 |   |
|                                                                       |

Seeaccompanying notes to condensed consolidated financialstatements.

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Nalco Holdings LLC and SubsidiariesCondensed Consolidated Statements of Operations (Unaudited)(dollars inmillions)

|                                              |  |                                  |         |                                  |  |        |         |         |  |  |
|----------------------------------------------|--|----------------------------------|---------|----------------------------------|--|--------|---------|---------|--|--|
|                                         |  | ThreeMonths ended March 31, 2005 |         | Three Monthsended March 31, 2004 |
| Netsales                                     |  | $                                | 777.6   |                             |  | $      | 713.3   |    |
| Operatingcosts andexpenses:                  |  |                             |    |                             |  |   |    |    |
| Costof product sold                          |  |                             | 412.4   |                             |  |   | 374.4   |    |
| Selling,administrative, and researchexpenses |  |                             | 258.5   |                             |  |   | 253.3   |    |
| Amortization ofintangibleassets              |  |                             | 20.6    |                             |  |   | 24.2    |    |
| In-process researchanddevelopment            |  |                             | — |                             |  |   | 122.3   |    |
| Businessoptimizationexpenses                 |  |                             | 0.8     |                             |  |   | — |    |
| Totaloperating costs andexpenses             |  |                             | 692.3   |                             |  |   | 774.2   |    |
|                                         |  |                             |    |                             |  |   |    |    |
| Operatingearnings(loss)                      |  |                             | 85.3    |                             |  |   | (60.9   | )  |
|                                         |  |                             |    |                             |  |   |    |    |
| Otherincome (expense),net                    |  |                             | (2.2    | )                           |  |   | (3.5    | )  |
| Interestincome                               |  |                             | 2.1     |                             |  |   | 2.7     |    |
| Interestexpense                              |  |                             | (54.9   | )                           |  |   | (53.3   | )  |
|                                         |  |                             |    |                             |  |   |    |    |
| Earnings(loss) before incometaxes            |  |                             | 30.3    |                             |  |   | (115.0  | )  |
|                                         |  |                             |    |                             |  |   |    |    |
| Incometaxprovision                           |  |                             | 13.0    |                             |  |   | 3.0     |    |
|                                         |  |                             |    |                             |  |   |    |    |
| Minorityinterests                            |  |                             | (1.2    | )                           |  |   | (1.0    | )  |
| Netearnings(loss)                            |  | $                                | 16.1    |                             |  | $      | (119.0  | )  |
|                                              |

Seeaccompanying notes to condensed consolidated financialstatements.

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Nalco Holdings LLC and SubsidiariesCondensed Consolidated Statements of Cash Flows (Unaudited)(dollars inmillions)

|                                                                                          |  |                                  |         |                                  |  |        |         |         |  |  |
|------------------------------------------------------------------------------------------|--|----------------------------------|---------|----------------------------------|--|--------|---------|---------|--|--|
|                                                                                     |  | ThreeMonths ended March 31, 2005 |         | Three Monthsended March 31, 2004 |
| **Operatingactivities**                                                                  |  |                             |    |                             |  |   |    |    |
| Net earnings(loss)                                                                       |  | $                                | 16.1    |                             |  | $      | (119.0  | )  |
| Adjustmentsto reconcile net earnings (loss) to net cash provided by operatingactivities: |  |                             |    |                             |  |   |    |    |
| Depreciation                                                                             |  |                             | 33.2    |                             |  |   | 28.7    |    |
| Amortization                                                                             |  |                             | 20.6    |                             |  |   | 24.2    |    |
| In-processresearch anddevelopment                                                        |  |                             | — |                             |  |   | 122.3   |    |
| Amortizationof deferred financingcosts                                                   |  |                             | 2.7     |                             |  |   | 2.8     |    |
| Other,net                                                                                |  |                             | 14.1    |                             |  |   | 3.2     |    |
| Changes in operatingassets andliabilities                                                |  |                             | (69.8   | )                           |  |   | 22.3    |    |
| Netcash provided by operatingactivities                                                  |  |                             | 16.9    |                             |  |   | 84.5    |    |
|                                                                                     |  |                             |    |                             |  |   |    |    |
| **Investingactivities**                                                                  |  |                             |    |                             |  |   |    |    |
| Purchase priceadjustment on acquisition of Ondeo NalcoGroup                              |  |                             | (3.2    | )                           |  |   | 25.6    |    |
| Additions toproperty, plant, and equipment,net                                           |  |                             | (12.3   | )                           |  |   | (16.4   | )  |
| Other investingactivities                                                                |  |                             | (1.6    | )                           |  |   | (2.2    | )  |
| Netcash provided by (used for) investingactivities                                       |  |                             | (17.1   | )                           |  |   | 7.0     |    |
|                                                                                     |  |                             |    |                             |  |   |    |    |
| **Financingactivities**                                                                  |  |                             |    |                             |  |   |    |    |
| Changes inshort-term debt,net                                                            |  |                             | 7.9     |                             |  |   | (2.7    | )  |
| Proceeds fromlong-term debt                                                              |  |                             | 0.1     |                             |  |   | 0.4     |    |
| Repayments oflong-term debt                                                              |  |                             | (2.1    | )                           |  |   | (60.0   | )  |
| Capitaldistributions                                                                     |  |                             | — |                             |  |   | — |    |
| Other                                                                                    |  |                             | (4.0    | )                           |  |   | — |    |
| Netcash provided by (used for) financingactivities                                       |  |                             | 1.9     |                             |  |   | (62.3   | )  |
| Effect ofexchange rate changes on cash and cashequivalents                               |  |                             | (0.5    | )                           |  |   | (0.4    | )  |
| Increasein cash and cashequivalents                                                      |  |                             | 1.2     |                             |  |   | 28.8    |    |
| Cash and cashequivalents at beginning ofperiod                                           |  |                             | 33.2    |                             |  |   | 100.0   |    |
| Cashand cash equivalents at end ofperiod                                                 |  | $                                | 34.4    |                             |  | $      | 128.8   |    |
|                                                                                          |

Seeaccompanying notes to condensed consolidated financialstatements.

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NalcoHoldings LLC and Subsidiaries Notes to Condensed ConsolidatedFinancial Statements (Unaudited)

March 31, 2005

1.    Descriptionof Business and Change in Ownership

Description ofBusiness

Nalco Holdings LLC and subsidiaries (the Company) isengaged in the worldwide manufacture and sale of highly specializedservice chemical programs. This includes production and service relatedto the sale 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 November 4,2003, Nalco Holdings LLC (the Buyer), a newly-formed entity controlledby affiliates of The Blackstone Group, L.P., Apollo Management, L.P.,and The Goldman Sachs Group, Inc. (collectively, the Sponsors),pursuant to a Stock Purchase Agreement, as amended, with Suez S.A.(Suez or Seller) and certain of its affiliates, acquired the net assetsof Ondeo Nalco Group for $4,127.1 million, including direct costs ofthe acquisition of $125.6 million, excluding assumed debt of $30.2million, and subject to certain closing and post-closing adjustments(the Acquisition).

The Buyer was capitalized by equityinvestments totaling $991.9 million from the Sponsors and $10.0 millionfrom Dr. William H. Joyce, the Chairman and Chief Executive Officer ofthe Company. The equity investments were made to Nalco InvestmentHoldings LLC, which, in turn, contributed $1,001.9 million to the Buyerand was its parent company until January 14, 2004. Funding for theAcquisition included the equity investments and the issuance of seniornotes and senior subordinated notes in a private offering, and newrevolving credit and term loan facilities by the Buyer, through its100% owned subsidiary, Nalco Company.

The Stock PurchaseAgreement provided for certain adjustments of the purchase price,including adjustments based on the closing working capital andindebtedness (as both are defined in the Stock Purchase Agreement) ofthe Ondeo Nalco Group at the date of the Acquisition. On March 25,2004, the Buyer and Suez agreed to a $25.6 million working capitaladjustment payable to the Buyer plus interest. The Buyer recorded thepurchase price adjustment in 2004 by decreasing goodwill.

TheStock Purchase Agreement also provided for adjustments of the purchaseprice for taxes paid, or tax refunds received, by the Buyer for periodsprior to the Acquisition, to the extent not already taken into accountin the closing working capital at the date of the Acquisition. Duringthe year ended December 31, 2004, such purchase price adjustmentsresulted in a net payment of $0.3 million by the Buyer, which wasrecorded as an increase to goodwill. An additional purchase priceadjustment of $3.2 million paid by the Company in January 2005 was alsoaccrued and reflected as an increase to goodwill in 2004.

OnJanuary 14, 2004, Nalco Investment Holdings LLC contributed its100% interest in the Buyer to a newly formed entity, NalcoFinance Holdings LLC. As of that date, Nalco Finance Holdings LLCbecame the direct parent company of the Buyer. Subsequent to that date,the Sponsors 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. wassubsequently renamed Nalco Holding Company.

As part of theallocation of the purchase price for the Acquisition, the Companyrecorded a one-time charge for purchased in-process research anddevelopment (IPR&D) expenses of $122.3 million during the threemonths ended March 31, 2004. The value of purchased IPR&D wascomprised of five ongoing development projects at the date of theAcquisition. Purchased IPR&D was derived by 

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1.    Descriptionof Business and Change in Ownership   (continued)

assigning values to those projects identifiedby management as having economic value, but that had not yet reachedtechnological feasibility and had no alternative future use. Theseproducts had not been released to the market as of the date of theAcquisition, but the features and functionality of the products hadbeen defined.

The consolidated statement of operations for thethree months ended March 31, 2004 includes an additional $14.1 millionin cost of products sold related to the sale of inventory that had beenrevalued at selling price less costs to sell in the allocation of thepurchase price for the Acquisition.

In conjunction with theAcquisition, the Company formulated a plan to exit or restructurecertain activities. The Company recorded liabilities of $35.5 million,primarily for employee severance and related costs, in connection withthe Company's plan to exit or restructure certain activities. TheCompany expects to complete these activities by the end of 2005. As ofDecember 31, 2004, $3.8 million remained of this accrual, and therewere no charges against it during the three months ended March 31,2005.

2.    Basis of Presentation

These consolidatedfinancial statements should be read in conjunction with theconsolidated and combined financial statements and notes theretoincluded in the Annual Report for Nalco Holdings LLC and subsidiariesfor the fiscal year ended December 31, 2004.

The accompanyingunaudited consolidated financial statements have been prepared inaccordance with generally accepted accounting principles for interimfinancial information. Accordingly, they do not include all of theinformation and footnotes required by accounting principles generallyaccepted in the United States for complete financial statements.Management believes these financial statements include all normalrecurring adjustments considered necessary for a fair presentation ofthe financial position and results of operations of the Company.Operating results for the three months ended March 31, 2005 are notnecessarily indicative of results that may be expected for the yearended December 31, 2005.

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

3.    Goodwilland Other Intangible Assets

The changes in goodwill for theperiod were asfollows:

|                                        |  |        |         |         |  |  |
|----------------------------------------|--|--------|---------|---------|--|--|
| **(dollarsin millions)**               |  |   |
| Balance as of December 31,2004         |  | $      | 2,368.3 |    |
| Preacquisition income taxuncertainties |  |   | 0.4     |    |
| Effect of foreign currencytranslation  |  |   | (32.6   | )  |
| Balance as ofMarch 31,2005             |  | $      | 2,336.1 |    |
|                                        |

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3.    Goodwilland Other Intangible Assets   (continued)

The following table reflects intangibleassets and related amortizationinformation:

|                                              |  |                     |         |                         |  |             |         |                         |  |        |         |        |  |        |         |         |  |        |
|----------------------------------------------|--|---------------------|---------|-------------------------|--|-------------|---------|-------------------------|--|--------|---------|--------|--|--------|---------|---------|--|--------|
|                                         |  | Asof March 31, 2005 |         | As of December 31,2004  |
| (dollars inmillions)                         |  | GrossAmount         |         | AccumulatedAmortization |  | GrossAmount |         | AccumulatedAmortization |
| Intangibleassets subject toamortization:     |  |                |    |                    |  |        |    |                    |  |   |    |   |  |   |    |    |  |   |   |   |  |   |   |   |
| Customerrelationships                        |  | $                   | 500.1   |                    |  | $           | (120.2  | )                  |  | $      | 506.6   |   |  | $      | (103.5  | )  |
| Patentsand developedtechnology               |  |                | 100.5   |                    |  |        | (14.7   | )                  |  |   | 100.5   |   |  |   | (12.2   | )  |
| Other                                        |  |                | 2.2     |                    |  |        | — |                    |  |   | 2.2     |   |  |   | — |    |
| Intangibleassets not subject toamortization: |  |                |    |                    |  |        |    |                    |  |   |    |   |  |   |    |    |
| Trademarksand tradenames                     |  |                | 830.0   |                    |  |        | — |                    |  |   | 830.0   |   |  |   | — |    |
|                                         |  | $                   | 1,432.8 |                    |  | $           | (134.9  | )                  |  | $      | 1,439.3 |   |  | $      | (115.7  | )  |
|                                              |

4.    Debt

Debt consists of thefollowing:

|                                              |  |              |         |                 |  |        |         |        |  |  |
|----------------------------------------------|--|--------------|---------|-----------------|--|--------|---------|--------|--|--|
| (dollarsin millions)                         |  | March31,2005 |         | December31,2004 |
| **Short-term**                               |  |         |    |            |  |   |    |   |
| Checksoutstanding and bankoverdrafts         |  | $            | 24.6    |            |  | $      | 16.9    |   |
| Currentmaturities of long-termdebt           |  |         | 0.8     |            |  |   | 0.8     |   |
|                                         |  | $            | 25.4    |            |  | $      | 17.7    |   |
| **Long-term**                                |  |         |    |            |  |   |    |   |
| Securitizedtrade accounts receivablefacility |  | $            | 95.2    |            |  | $      | 97.3    |   |
| Term loan A,due November 2009                |  |         | 214.4   |            |  |   | 218.4   |   |
| Termloan B, due November2010                 |  |         | 1,081.0 |            |  |   | 1,081.0 |   |
| Senior notes,due November 2011               |  |         | 925.2   |            |  |   | 937.4   |   |
| Seniorsubordinated notes, due November2013   |  |         | 725.2   |            |  |   | 737.4   |   |
| Unsecured notes,due May2008                  |  |         | 27.8    |            |  |   | 27.8    |   |
| Other                                        |  |         | 2.2     |            |  |   | 2.1     |   |
|                                         |  |         | 3,071.0 |            |  |   | 3,101.4 |   |
| Less:Currentportion                          |  |         | 0.8     |            |  |   | 0.8     |   |
|                                         |  | $            | 3,070.2 |            |  | $      | 3,100.6 |   |
|                                              |

5.    Unitholder'sEquity

Unitholder's equity consists of thefollowing:

|                                       |  |               |         |                   |  |        |         |         |  |  |
|---------------------------------------|--|---------------|---------|-------------------|--|--------|---------|---------|--|--|
| (dollarsin millions)                  |  | March 31,2005 |         | December 31, 2004 |
| Capitalaccount                        |  | $             | 1,012.9 |              |  | $      | 1,012.9 |    |
| Accumulateddeficit                    |  |          | (112.2  | )            |  |   | (128.3  | )  |
| Accumulatedother comprehensiveincome: |  |          |    |              |  |   |    |    |
| Derivatives                           |  |          | 0.3     |              |  |   | (0.2    | )  |
| Foreigncurrency translationadjustment |  |          | 112.2   |              |  |   | 133.3   |    |
| Totalunitholder'sequity               |  | $             | 1,013.2 |              |  | $      | 1,017.7 |    |
|                                       |

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6.    Pensionand Other Postretirement Benefit Plans

The components of netperiodic pension cost and the cost of other postretirement benefits forthe three months ended March 31, 2005 and 2004 were asfollows:

|                                  |  |                              |         |                              |  |                              |         |                               |  |        |         |         |  |        |         |        |  |  |
|----------------------------------|--|------------------------------|---------|------------------------------|--|------------------------------|---------|-------------------------------|--|--------|---------|---------|--|--------|---------|--------|--|--|
|                             |  | PensionBenefits              |         | OtherPostretirementBenefits  |
| (dollars inmillions)             |  | ThreeMonthsendedMarch31,2005 |         | ThreeMonthsendedMarch31,2004 |  | ThreeMonthsendedMarch31,2005 |         | ThreeMonthsendedMarch 31,2004 |
| Servicecost                      |  | $                            | 7.1     |                         |  | $                            | 6.5     |                          |  | $      | 1.4     |    |  | $      | 1.7     |   |
| Interestcost                     |  |                         | 10.2    |                         |  |                         | 9.0     |                          |  |   | 2.1     |    |  |   | 2.6     |   |
| Expectedreturn on planassets     |  |                         | (6.5    | )                       |  |                         | (5.9    | )                        |  |   | — |    |  |   | — |   |
| Amortizationof prior servicecost |  |                         | — |                         |  |                         | — |                          |  |   | (0.9    | )  |  |   | — |   |
| Netperiodiccost                  |  | $                            | 10.8    |                         |  | $                            | 9.6     |                          |  | $      | 2.6     |    |  | $      | 4.3     |   |
|                                  |

InJanuary 2005, final regulations implementing the Medicare PrescriptionDrug, Improvement, and Modernization Act of 2003 (the Act) were issuedby the Centers for Medicare & Medicaid Services (CMS) of the U.S.Department of Health and Human Services. The final regulations clarifyhow companies providing retiree prescription drug benefits shoulddetermine if those benefits are actuarially equivalent to Medicare PartD coverage. Under the Act, a federal subsidy is available, beginning inJanuary 2006, to those companies providing prescription drug benefitsthat are actuarially equivalent to Medicare Part D coverage.

Based on the proposed regulations issued by CMS in July 2004, theCompany concluded that its retiree prescription drug benefit plan wasnot actuarially equivalent to Medicare Part D coverage and that it didnot qualify for the subsidy provided by the Act. However, as a resultof the final regulations issued in January 2005, the Company hasdetermined that its plan is actuarially equivalent, and the Companywill qualify for the subsidy.

As a result of qualifying for thesubsidy, the accumulated benefit obligation for the Company'sdefined postretirement benefit plans other than pensions has beenreduced by approximately $25.4 million. The service and interest costcomponents of other postretirement benefits expense was reduced by $0.1million and $0.2 million, respectively, for the three months endedMarch 31, 2005.

7.    BusinessOptimization Expenses

In addition to the Company's planto exit or restructure certain activities that was formulated inconjunction with the Acquisition, the Company is continuing to redesignand optimize its business and work processes. Business processoptimization expenses, consisting mostly of employee severance andrelated costs, were $0.8 million for the three months ended March 31,2005.

8

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8.    Summaryof Other Income (Expense)

The components of other income(expense), net for the three months ended March 31, 2005 and 2004,include thefollowing:

|                                                 |  |                                |         |                                |  |        |         |         |  |  |
|-------------------------------------------------|--|--------------------------------|---------|--------------------------------|--|--------|---------|---------|--|--|
| (dollarsin millions)                            |  | Three Monthsended March31,2005 |         | Three Monthsended March31,2004 |
| Impairment loss on business held forsale        |  | $                              | (2.4    | )                         |  | $      | — |    |
| Sponsormonitoringfees                           |  |                           | — |                           |  |   | (2.5    | )  |
| Franchisetaxes                                  |  |                           | (0.7    | )                         |  |   | (0.8    | )  |
| Equity in earningsof unconsolidatedsubsidiaries |  |                           | 0.8     |                           |  |   | 0.7     |    |
| Foreigncurrency exchangeadjustments             |  |                           | (0.7    | )                         |  |   | (0.9    | )  |
| Other                                           |  |                           | 0.8     |                           |  |   | — |    |
|                                            |  | $                              | (2.2    | )                         |  | $      | (3.5    | )  |
|                                                 |

9.    IncomeTaxes

The Company's effective income tax rate was42.9% for the three months ended March 31, 2005. The rate variesfrom the U.S. statutory income tax rate of 35% due primarily tothe incremental tax on dividends received from non-U.S. subsidiaries,foreign taxes provided at less than the 35% U.S. statutory rate,U.S. state income taxes, nondeductible expenses, and other permanentdifferences.

These items contributed to the variation betweenthe U.S. statutory income tax rate and the Company's effectiveincome tax rate for the three months ended March 31, 2004. In addition,the effective rate was impacted by the charge for purchased IPR&D,which is not tax deductible.

The effective rate of the provisionfor income taxes differs from the U.S. statutory tax rate due to thefollowingitems:

|                        |  |                                |         |                                |  |        |       |         |  |  |
|------------------------|--|--------------------------------|---------|--------------------------------|--|--------|-------|---------|--|--|
| (dollarsin millions)   |  | Three Monthsended March31,2005 |         | Three Monthsended March31,2004 |
| U.S. statutory taxrate |  | $                              | 10.6    |                           |  | $      | (40.2 | )  |
| IPR&D              |  |                           | — |                           |  |   | 42.8  |    |
| Other                  |  |                           | 2.4     |                           |  |   | 0.4   |    |
| Incometaxprovision     |  | $                              | 13.0    |                           |  | $      | 3.0   |    |
|                        |

10.    ComprehensiveIncome (Loss)

Total comprehensive income (loss) and itscomponents, net of related tax, for the three months ended March 31,2005 and 2004, are asfollows:

|                                                       |  |                                |        |                                |  |        |         |         |  |  |
|-------------------------------------------------------|--|--------------------------------|--------|--------------------------------|--|--------|---------|---------|--|--|
| (dollarsin millions)                                  |  | Three Monthsended March31,2005 |        | Three Monthsended March31,2004 |
| Net earnings(loss)                                    |  | $                              | 16.1   |                           |  | $      | (119.0  | )  |
| Othercomprehensive income (loss), net of incometaxes: |  |                           |   |                           |  |   |    |    |
| Derivatives                                           |  |                           | 0.5    |                           |  |   | — |    |
| Foreigncurrency translationadjustments                |  |                           | (21.1  | )                         |  |   | 9.5     |    |
| Comprehensiveloss                                     |  | $                              | (4.5   | )                         |  | $      | (109.5  | )  |
|                                                       |

11.    SegmentInformation

The Company provides integrated water treatment andprocess improvement services for industrial and institutionalapplications, using technologically advanced solutions, combiningchemical products and equipment, and consistent, reliable on-siteservice and expertise. These solutions and services enable theCompany's customers to improve production yields, lowermanufacturing costs, extend asset lives and maintain environmentalstandards at costs that represent a small share of their overallproduction expense.

9

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11.    SegmentInformation   (continued)

The Company is organized based on the endmarkets it serves. The organization is comprised of the followingreportable segments:

Industrial and Institutional Services– This segment serves the global water treatment and processchemical needs of the industrial, institutional, and municipalmarkets.

Energy Services – This segment servesthe process chemicals and water treatment needs of the global petroleumand petrochemical industries in both upstream and downstreamapplications.

Paper Services – This segmentserves the process chemicals and water treatment needs of the globalpulp and paper industry.

Other – This segmentserves the alternative channels to market, supply chain activities, andcertain other operating expenses not allocated to a segment. It alsoincludes the Company's subsidiary in India and the Katayama Nalcojoint venture.

The Company evaluates the performance of itssegments 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:

|                                     |  |                               |       |                               |  |        |       |        |  |  |
|-------------------------------------|--|-------------------------------|-------|-------------------------------|--|--------|-------|--------|--|--|
| (dollarsin millions)                |  | ThreeMonthsendedMarch 31,2005 |       | ThreeMonthsendedMarch 31,2004 |
| Industrialand InstitutionalServices |  | $                             | 343.7 |                          |  | $      | 329.3 |   |
| EnergyServices                      |  |                          | 209.9 |                          |  |   | 194.2 |   |
| PaperServices                       |  |                          | 170.3 |                          |  |   | 164.1 |   |
| Other                               |  |                          | 53.7  |                          |  |   | 25.7  |   |
| Netsales                            |  | $                             | 777.6 |                          |  | $      | 713.3 |   |
|                                     |

Thefollowing table presents direct contribution by reportable segment andreconciles the total segment direct contribution to earnings (loss)before incometaxes:

|                                     |  |                               |         |                              |  |        |         |         |  |  |
|-------------------------------------|--|-------------------------------|---------|------------------------------|--|--------|---------|---------|--|--|
| (dollarsin millions)                |  | ThreeMonthsendedMarch 31,2005 |         | ThreeMonthsendedMarch31,2004 |
| Segment directcontribution:         |  |                          |    |                         |  |   |    |    |
| Industrialand InstitutionalServices |  | $                             | 75.9    |                         |  | $      | 79.9    |    |
| EnergyServices                      |  |                          | 47.5    |                         |  |   | 44.3    |    |
| PaperServices                       |  |                          | 34.7    |                         |  |   | 42.1    |    |
| Other                               |  |                          | (5.4    | )                       |  |   | (34.9   | )  |
| Totalsegment directcontribution     |  |                          | 152.7   |                         |  |   | 131.4   |    |
|                                |  |                          |    |                         |  |   |    |    |
| Expensesnot allocated tosegments:   |  |                          |    |                         |  |   |    |    |
| Administrativeexpenses              |  |                          | 46.0    |                         |  |   | 45.8    |    |
| Amortizationof intangibleassets     |  |                          | 20.6    |                         |  |   | 24.2    |    |
| In-processresearch anddevelopment   |  |                          | — |                         |  |   | 122.3   |    |
| Businessoptimizationexpenses        |  |                          | 0.8     |                         |  |   | — |    |
| Operatingearnings (loss)            |  |                          | 85.3    |                         |  |   | (60.9   | )  |
| Otherincome (expense),net           |  |                          | (2.2    | )                       |  |   | (3.5    | )  |
| Interestincome                      |  |                          | 2.1     |                         |  |   | 2.7     |    |
| Interestexpense                     |  |                          | (54.9   | )                       |  |   | (53.3   | )  |
| Earnings(loss) before incometaxes   |  | $                             | 30.3    |                         |  | $      | (115.0  | )  |
|                                     |

10

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12.    Contingencies andLitigation

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 March 31, 2005.

These environmentalreserves represent management's current estimate of itsproportional 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 ended March 31, 2005, relating toenvironmental compliance and clean up activities, were notsignificant.

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 historically and theCompany does not anticipate these matters to present any material riskto the Company's business in the future. Notwithstanding, theCompany cannot predict the outcome of any such lawsuits or theinvolvement the Company might have in these matters in the future.

The Company has received subpoenas from the U.S. Department ofJustice for documents and testimony relating to its storage of claimedhazardous materials, the claimed leakage of wastewater and othermatters at its plant in Garyville, Louisiana. No charges or indictmentshave been filed, but the outcome of this investigation is unknown tothe Company.

In the ordinary course of its business, the Companyis also a party to a number of lawsuits and is subject to variousclaims relating to trademarks, employee matters, contracts,transactions, chemicals and other matters, the outcome of which, in theopinion of management, should not have a material effect on theconsolidated financial position of the Company. However, we cannotpredict the outcome of any litigation or the potential for futurelitigation. Were an unfavorable ruling to occur, there exists thepossibility of a material adverse impact on the results of operationsfor the period in which the ruling occurs. The Company maintainsaccruals where the outcome of the matter is probable and can bereasonably estimated.

13.    Guarantees

No significant guarantees were outstanding at March 31, 2005, otherthan subsidiary-related performance guarantees.

The Company had$36.8 million of letters of credit outstanding at March 31, 2005.

11

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14.    SupplementalGuarantor Condensed Financial Statements

In connection with theAcquisition, Nalco Holdings LLC (presented as Parent in the followingtables), through its wholly owned subsidiary, Nalco Company (presentedas Issuer in the following tables), issued Senior Notes and SeniorSubordinated Notes as further described in Note 4. The Senior Notes arefully, unconditionally and jointly and severally guaranteed on anunsecured senior 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 consolidating financial statementspresent the results of operations, financial position and cash flows of(1) the Parent, (2) the Issuer, (3) the Guarantors, (4) theNon-Guarantors and (5) eliminations to arrive at the information forNalco Holdings LLC on a consolidated basis. Separate financialstatements and other disclosures concerning the Guarantors are notpresented because management does not believe that such information ismaterial to investors.

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NalcoHoldings LLC and SubsidiariesCondensed Consolidating BalanceSheet March 31, 2005(dollars inmillions)

|                                                           |  |        |         |        |  |                       |         |                           |  |              |         |              |  |        |         |        |  |        |          |         |  |        |         |        |  |  |
|-----------------------------------------------------------|--|--------|---------|--------|--|-----------------------|---------|---------------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|----------|---------|--|--------|---------|--------|--|--|
|                                                      |  | Parent |         | Issuer |  | GuarantorSubsidiaries |         | Non-GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| Cash& cash equivalents                                |  | $      | — |   |  | $                     | 0.2     |                      |  | $            | 2.3     |         |  | $      | 31.9    |   |  | $      | —  |    |  | $      | 34.4    |   |
| Trade accountsreceivable                                  |  |   | — |   |  |                  | (15.2   | )                    |  |         | 3.4     |         |  |   | 599.3   |   |  |   | —  |    |  |   | 587.5   |   |
| Inventories– finishedproducts                       |  |   | — |   |  |                  | 76.7    |                      |  |         | 53.5    |         |  |   | 143.5   |   |  |   | —  |    |  |   | 273.7   |   |
| Inventories– materials & work inprocess         |  |   | — |   |  |                  | 15.5    |                      |  |         | 17.5    |         |  |   | 45.8    |   |  |   | —  |    |  |   | 78.8    |   |
| Notesreceivable from relatedparties                       |  |   | — |   |  |                  | 22.3    |                      |  |         | 146.0   |         |  |   | 23.7    |   |  |   | (192.0   | )  |  |   | — |   |
| Otherreceivables from relatedparties                      |  |   | — |   |  |                  | 1.1     |                      |  |         | 280.9   |         |  |   | 96.5    |   |  |   | (378.5   | )  |  |   | — |   |
| Prepaidexpenses, taxes, and other currentassets           |  |   | — |   |  |                  | 22.0    |                      |  |         | 5.3     |         |  |   | 48.2    |   |  |   | —  |    |  |   | 75.5    |   |
| **TotalCurrentAssets**                                    |  |   | — |   |  |                  | 122.6   |                      |  |         | 508.9   |         |  |   | 988.9   |   |  |   | (570.5   | )  |  |   | 1,049.9 |   |
| Property,plant, and equipment,net                         |  |   | — |   |  |                  | 261.3   |                      |  |         | 149.9   |         |  |   | 404.7   |   |  |   | —  |    |  |   | 815.9   |   |
| Investmentinsubsidiaries                                  |  |   | 1,025.1 |   |  |                  | 2,438.3 |                      |  |         | 368.9   |         |  |   | — |   |  |   | (3,832.3 | )  |  |   | — |   |
| Goodwill                                                  |  |   | — |   |  |                  | 719.7   |                      |  |         | 318.2   |         |  |   | 1,298.2 |   |  |   | —  |    |  |   | 2,336.1 |   |
| Intangibles                                               |  |   | — |   |  |                  | 1,039.3 |                      |  |         | 55.9    |         |  |   | 202.7   |   |  |   | —  |    |  |   | 1,297.9 |   |
| Otherassets                                               |  |   | — |   |  |                  | 296.7   |                      |  |         | 19.2    |         |  |   | 42.4    |   |  |   | —  |    |  |   | 358.3   |   |
| **TotalAssets**                                           |  | $      | 1,025.1 |   |  | $                     | 4,877.9 |                      |  | $            | 1,421.0 |         |  | $      | 2,936.9 |   |  | $      | (4,402.8 | )  |  | $      | 5,858.1 |   |
| Accountspayable                                           |  | $      | — |   |  | $                     | 83.0    |                      |  | $            | 43.9    |         |  | $      | 133.5   |   |  | $      | —  |    |  | $      | 260.4   |   |
| Short-termdebt                                            |  |   | — |   |  |                  | 0.8     |                      |  |         | 1.1     |         |  |   | 23.5    |   |  |   | —  |    |  |   | 25.4    |   |
| Othercurrentliabilities                                   |  |   | — |   |  |                  | 71.4    |                      |  |         | 28.5    |         |  |   | 166.5   |   |  |   | —  |    |  |   | 266.4   |   |
| Intercompanyaccountspayable                               |  |   | — |   |  |                  | 57.7    |                      |  |         | 36.7    |         |  |   | 97.6    |   |  |   | (192.0   | )  |  |   | — |   |
| **TotalCurrentLiabilities**                               |  |   | — |   |  |                  | 212.9   |                      |  |         | 110.2   |         |  |   | 421.1   |   |  |   | (192.0   | )  |  |   | 552.2   |   |
| Long-termdebt                                             |  |   | — |   |  |                  | 2,973.6 |                      |  |         | — |         |  |   | 96.6    |   |  |   | —  |    |  |   | 3,070.2 |   |
| Deferredincometaxes                                       |  |   | — |   |  |                  | 399.3   |                      |  |         | (1.0    | )       |  |   | 97.0    |   |  |   | —  |    |  |   | 495.3   |   |
| Accruedpensionbenefits                                    |  |   | — |   |  |                  | 231.6   |                      |  |         | 38.7    |         |  |   | 148.6   |   |  |   | —  |    |  |   | 418.9   |   |
| Intercompanynotes payable-longterm                        |  |   | — |   |  |                  | 377.5   |                      |  |         | — |         |  |   | 1.0     |   |  |   | (378.5   | )  |  |   | — |   |
| Otherliabilities                                          |  |   | — |   |  |                  | 245.1   |                      |  |         | 27.0    |         |  |   | 24.3    |   |  |   | —  |    |  |   | 296.4   |   |
| **TotalOtherLiabilities**                                 |  |   | — |   |  |                  | 4,227.1 |                      |  |         | 64.7    |         |  |   | 367.5   |   |  |   | (378.5   | )  |  |   | 4,280.8 |   |
| **MinorityInterest**                                      |  |   | 11.9    |   |  |                  | — |                      |  |         | — |         |  |   | 11.9    |   |  |   | (11.9    | )  |  |   | 11.9    |   |
| **TotalUnitholder's/Shareholders'Equity**                 |  |   | 1,013.2 |   |  |                  | 437.9   |                      |  |         | 1,246.1 |         |  |   | 2,136.4 |   |  |   | (3,820.4 | )  |  |   | 1,013.2 |   |
| **TotalLiabilities and Unitholder's/Shareholders'Equity** |  | $      | 1,025.1 |   |  | $                     | 4,877.9 |                      |  | $            | 1,421.0 |         |  | $      | 2,936.9 |   |  | $      | (4,402.8 | )  |  | $      | 5,858.1 |   |
|                                                           |

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Nalco Holdings LLC andSubsidiaries Condensed Consolidating Balance Sheet December31, 2004(dollars inmillions)

|                                                           |  |        |         |        |  |                       |         |                           |  |              |         |              |  |        |         |        |  |        |          |         |  |        |         |        |  |  |
|-----------------------------------------------------------|--|--------|---------|--------|--|-----------------------|---------|---------------------------|--|--------------|---------|--------------|--|--------|---------|--------|--|--------|----------|---------|--|--------|---------|--------|--|--|
|                                                      |  | Parent |         | Issuer |  | GuarantorSubsidiaries |         | Non-GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| Cash& cash equivalents                                |  | $      | — |   |  | $                     | 1.3     |                      |  | $            | 0.8     |         |  | $      | 31.1    |   |  | $      | —  |    |  | $      | 33.2    |   |
| Trade accountsreceivable                                  |  |   | — |   |  |                  | (16.4   | )                    |  |         | 4.4     |         |  |   | 606.2   |   |  |   | —  |    |  |   | 594.2   |   |
| Inventories– finishedproducts                       |  |   | — |   |  |                  | 70.6    |                      |  |         | 47.8    |         |  |   | 127.0   |   |  |   | —  |    |  |   | 245.4   |   |
| Inventories– materials & work inprocess         |  |   | — |   |  |                  | 13.9    |                      |  |         | 15.6    |         |  |   | 38.6    |   |  |   | —  |    |  |   | 68.1    |   |
| Notesreceivable from relatedparties                       |  |   | — |   |  |                  | 17.4    |                      |  |         | 133.7   |         |  |   | 24.3    |   |  |   | (175.4   | )  |  |   | — |   |
| Otherreceivables from relatedparties                      |  |   | — |   |  |                  | 1.2     |                      |  |         | 296.4   |         |  |   | 95.4    |   |  |   | (393.0   | )  |  |   | — |   |
| Prepaidexpenses, taxes, and other currentassets           |  |   | — |   |  |                  | 36.4    |                      |  |         | 6.9     |         |  |   | 46.8    |   |  |   | —  |    |  |   | 90.1    |   |
| **TotalCurrentAssets**                                    |  |   | — |   |  |                  | 124.4   |                      |  |         | 505.6   |         |  |   | 969.4   |   |  |   | (568.4   | )  |  |   | 1,031.0 |   |
| Property,plant, and equipment,net                         |  |   | — |   |  |                  | 270.4   |                      |  |         | 152.3   |         |  |   | 424.6   |   |  |   | —  |    |  |   | 847.3   |   |
| Investmentinsubsidiaries                                  |  |   | 1,031.8 |   |  |                  | 2,437.6 |                      |  |         | 368.9   |         |  |   | — |   |  |   | (3,838.3 | )  |  |   | — |   |
| Goodwill                                                  |  |   | — |   |  |                  | 719.3   |                      |  |         | 318.2   |         |  |   | 1,330.8 |   |  |   | —  |    |  |   | 2,368.3 |   |
| Intangibles                                               |  |   | — |   |  |                  | 1,047.6 |                      |  |         | 58.6    |         |  |   | 217.4   |   |  |   | —  |    |  |   | 1,323.6 |   |
| Otherassets                                               |  |   |    |   |  |                  | 300.1   |                      |  |         | 19.9    |         |  |   | 43.5    |   |  |   | —  |    |  |   | 363.5   |   |
| **TotalAssets**                                           |  | $      | 1,031.8 |   |  | $                     | 4,899.4 |                      |  | $            | 1,423.5 |         |  | $      | 2,985.7 |   |  | $      | (4,406.7 | )  |  | $      | 5,933.7 |   |
| Accountspayable                                           |  | $      | — |   |  | $                     | 77.4    |                      |  | $            | 39.9    |         |  | $      | 144.6   |   |  | $      | —  |    |  | $      | 261.9   |   |
| Short-termdebt                                            |  |   | — |   |  |                  | 4.2     |                      |  |         | 0.4     |         |  |   | 13.1    |   |  |   | —  |    |  |   | 17.7    |   |
| Othercurrentliabilities                                   |  |   | — |   |  |                  | 50.5    |                      |  |         | 62.6    |         |  |   | 198.6   |   |  |   | —  |    |  |   | 311.7   |   |
| Intercompanyaccountspayable                               |  |   | — |   |  |                  | 53.7    |                      |  |         | 35.9    |         |  |   | 85.8    |   |  |   | (175.4   | )  |  |   | — |   |
| **TotalCurrentLiabilities**                               |  |   | — |   |  |                  | 185.8   |                      |  |         | 138.8   |         |  |   | 442.1   |   |  |   | (175.4   | )  |  |   | 591.3   |   |
| Long-termdebt                                             |  |   | — |   |  |                  | 3,002.1 |                      |  |         | — |         |  |   | 98.5    |   |  |   | —  |    |  |   | 3,100.6 |   |
| Deferredincometaxes                                       |  |   | — |   |  |                  | 401.0   |                      |  |         | (2.6    | )       |  |   | 103.1   |   |  |   | —  |    |  |   | 501.5   |   |
| Accruedpensionbenefits                                    |  |   | — |   |  |                  | 226.4   |                      |  |         | 37.2    |         |  |   | 148.1   |   |  |   | —  |    |  |   | 411.7   |   |
| Intercompanynotes payable-longterm                        |  |   | — |   |  |                  | 391.6   |                      |  |         | — |         |  |   | 1.4     |   |  |   | (393.0   | )  |  |   | — |   |
| Otherliabilities                                          |  |   | — |   |  |                  | 241.9   |                      |  |         | 27.3    |         |  |   | 27.6    |   |  |   | —  |    |  |   | 296.8   |   |
| **TotalOtherLiabilities**                                 |  |   | — |   |  |                  | 4,263.0 |                      |  |         | 61.9    |         |  |   | 378.7   |   |  |   | (393.0   | )  |  |   | 4,310.6 |   |
| **MinorityInterest**                                      |  |   | 14.1    |   |  |                  | — |                      |  |         | — |         |  |   | 14.1    |   |  |   | (14.1    | )  |  |   | 14.1    |   |
| **Unitholder's/Shareholders'Equity**                      |  |   | 1,017.7 |   |  |                  | 450.6   |                      |  |         | 1,222.8 |         |  |   | 2,150.8 |   |  |   | (3,824.2 | )  |  |   | 1,017.7 |   |
| **TotalLiabilities and Unitholder's/Shareholders'Equity** |  | $      | 1,031.8 |   |  | $                     | 4,899.4 |                      |  | $            | 1,423.5 |         |  | $      | 2,985.7 |   |  | $      | (4,406.7 | )  |  | $      | 5,933.7 |   |
|                                                           |

14

----

Nalco Holdings LLC andSubsidiaries Condensed Consolidating Statement of OperationsThree Months ended March 31, 2005(dollars inmillions)

|                                              |  |        |         |         |  |                       |         |                           |  |              |         |              |  |        |        |         |  |        |         |         |  |        |        |         |  |  |
|----------------------------------------------|--|--------|---------|---------|--|-----------------------|---------|---------------------------|--|--------------|---------|--------------|--|--------|--------|---------|--|--------|---------|---------|--|--------|--------|---------|--|--|
|                                         |  | Parent |         | Issuer  |  | GuarantorSubsidiaries |         | Non-GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| **Netsales**                                 |  | $      | — |    |  | $                     | 275.1   |                      |  | $            | 148.5   |         |  | $      | 430.6  |    |  | $      | (76.6   | )  |  | $      | 777.6  |    |
| Operatingcosts andexpenses:                  |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |   |    |  |   |    |    |  |   |   |    |
| Costof productsold                           |  |   | — |    |  |                  | 178.3   |                      |  |         | 94.9    |         |  |   | 215.8  |    |  |   | (76.6   | )  |  |   | 412.4  |    |
| Selling,administrative, and researchexpenses |  |   | — |    |  |                  | 97.5    |                      |  |         | 29.5    |         |  |   | 131.5  |    |  |   | — |    |  |   | 258.5  |    |
| Amortizationof intangibleassets              |  |   | — |    |  |                  | 8.3     |                      |  |         | 2.7     |         |  |   | 9.6    |    |  |   | — |    |  |   | 20.6   |    |
| Businessoptimizationexpenses                 |  |   | — |    |  |                  | 0.4     |                      |  |         | — |         |  |   | 0.4    |    |  |   | — |    |  |   | 0.8    |    |
| Totaloperating costs andexpenses             |  |   | — |    |  |                  | 284.5   |                      |  |         | 127.1   |         |  |   | 357.3  |    |  |   | (76.6   | )  |  |   | 692.3  |    |
| **Operatingearnings(loss)**                  |  |   | — |    |  |                  | (9.4    | )                    |  |         | 21.4    |         |  |   | 73.3   |    |  |   | — |    |  |   | 85.3   |    |
|                                         |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |   |    |  |   |    |    |  |   |   |    |
| Otherincome (expense),net                    |  |   | 17.3    |    |  |                  | 28.1    |                      |  |         | 5.6     |         |  |   | (18.6  | )  |  |   | (34.6   | )  |  |   | (2.2   | )  |
| Interestincome                               |  |   | — |    |  |                  | 1.8     |                      |  |         | 2.2     |         |  |   | 9.2    |    |  |   | (11.1   | )  |  |   | 2.1    |    |
| Interestexpense                              |  |   | — |    |  |                  | (61.1   | )                    |  |         | (3.1    | )       |  |   | (1.8   | )  |  |   | 11.1    |    |  |   | (54.9  | )  |
| Earnings(loss) before incometaxes            |  |   | 17.3    |    |  |                  | (40.6   | )                    |  |         | 26.1    |         |  |   | 62.1   |    |  |   | (34.6   | )  |  |   | 30.3   |    |
|                                         |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |   |    |  |   |    |    |  |   |   |    |
| Incometax provision(benefit)                 |  |   | — |    |  |                  | (9.4    | )                    |  |         | 1.7     |         |  |   | 20.7   |    |  |   | — |    |  |   | 13.0   |    |
|                                         |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |   |    |  |   |    |    |  |   |   |    |
| Minorityinterests                            |  |   | (1.2    | )  |  |                  | — |                      |  |         | — |         |  |   | (1.2   | )  |  |   | 1.2     |    |  |   | (1.2   | )  |
| **Netearnings(loss)**                        |  | $      | 16.1    |    |  | $                     | (31.2   | )                    |  | $            | 24.4    |         |  | $      | 40.2   |    |  | $      | (33.4   | )  |  | $      | 16.1   |    |
|                                              |

15

----

Nalco Holdings LLC andSubsidiaries Condensed Consolidating Statement of OperationsThree Months ended March 31, 2004(dollars inmillions)

|                                              |  |        |         |         |  |                       |         |                           |  |              |         |              |  |        |         |         |  |        |         |         |  |        |        |         |  |  |
|----------------------------------------------|--|--------|---------|---------|--|-----------------------|---------|---------------------------|--|--------------|---------|--------------|--|--------|---------|---------|--|--------|---------|---------|--|--------|--------|---------|--|--|
|                                         |  | Parent |         | Issuer  |  | GuarantorSubsidiaries |         | Non-GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| **Netsales**                                 |  | $      | — |    |  | $                     | 259.4   |                      |  | $            | 126.0   |         |  | $      | 388.4   |    |  | $      | (60.5   | )  |  | $      | 713.3  |    |
| Operatingcosts andexpenses:                  |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |    |    |  |   |    |    |  |   |   |    |
| Costof productsold                           |  |   | — |    |  |                  | 150.6   |                      |  |         | 75.1    |         |  |   | 209.2   |    |  |   | (60.5   | )  |  |   | 374.4  |    |
| Selling,administrative, and researchexpenses |  |   | — |    |  |                  | 105.2   |                      |  |         | 29.0    |         |  |   | 119.1   |    |  |   | — |    |  |   | 253.3  |    |
| Amortizationof intangibleassets              |  |   | — |    |  |                  | 10.2    |                      |  |         | 3.0     |         |  |   | 11.0    |    |  |   | — |    |  |   | 24.2   |    |
| In-processresearch anddevelopment            |  |   | — |    |  |                  | 108.6   |                      |  |         | 13.7    |         |  |   | — |    |  |   | — |    |  |   | 122.3  |    |
| Totaloperating costs andexpenses             |  |   | — |    |  |                  | 374.6   |                      |  |         | 120.8   |         |  |   | 339.3   |    |  |   | (60.5   | )  |  |   | 774.2  |    |
| **Operatingearnings(loss)**                  |  |   | — |    |  |                  | (115.2  | )                    |  |         | 5.2     |         |  |   | 49.1    |    |  |   | — |    |  |   | (60.9  | )  |
|                                         |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |    |    |  |   |    |    |  |   |   |    |
| Otherincome (expense),net                    |  |   | (118.1  | )  |  |                  | 8.2     |                      |  |         | 6.4     |         |  |   | (18.0   | )  |  |   | 118.0   |    |  |   | (3.5   | )  |
| Interestincome                               |  |   | — |    |  |                  | 2.8     |                      |  |         | 1.0     |         |  |   | 0.4     |    |  |   | (1.5    | )  |  |   | 2.7    |    |
| Interestexpense                              |  |   | — |    |  |                  | (53.5   | )                    |  |         | (0.2    | )       |  |   | (1.1    | )  |  |   | 1.5     |    |  |   | (53.3  | )  |
| Earnings(loss) before incometaxes            |  |   | (118.1  | )  |  |                  | (157.7  | )                    |  |         | 12.4    |         |  |   | 30.4    |    |  |   | 118.0   |    |  |   | (115.0 | )  |
|                                         |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |    |    |  |   |    |    |  |   |   |    |
| Incometax provision(benefit)                 |  |   | (0.1    | )  |  |                  | (9.7    | )                    |  |         | 1.7     |         |  |   | 11.1    |    |  |   | — |    |  |   | 3.0    |    |
|                                         |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |    |    |  |   |    |    |  |   |   |    |
| Minorityinterests                            |  |   | (1.0    | )  |  |                  | — |                      |  |         | — |         |  |   | (1.0    | )  |  |   | 1.0     |    |  |   | (1.0   | )  |
| **Netearnings(loss)**                        |  | $      | (119.0  | )  |  | $                     | (148.0  | )                    |  | $            | 10.7    |         |  | $      | 18.3    |    |  | $      | 119.0   |    |  | $      | (119.0 | )  |
|                                              |

16

----

Nalco Holdings LLC andSubsidiaries Condensed Consolidating Statement of Cash FlowsThree Months ended March 31, 2005(dollars inmillions)

|                                                    |  |        |         |         |  |                       |         |                           |  |              |         |              |  |        |         |         |  |        |         |         |  |        |         |         |  |  |
|----------------------------------------------------|--|--------|---------|---------|--|-----------------------|---------|---------------------------|--|--------------|---------|--------------|--|--------|---------|---------|--|--------|---------|---------|--|--------|---------|---------|--|--|
|                                               |  | Parent |         | Issuer  |  | GuarantorSubsidiaries |         | Non-GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| **Operatingactivities**                            |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |    |    |  |   |    |    |  |   |    |    |
| Netearnings(loss)                                  |  | $      | 16.1    |    |  | $                     | (31.2   | )                    |  | $            | 24.4    |         |  | $      | 40.2    |    |  | $      | (33.4   | )  |  | $      | 16.1    |    |
| Non-cashadjustments                                |  |   | (16.1   | )  |  |                  | 25.3    |                      |  |         | 12.9    |         |  |   | 31.2    |    |  |   | 17.3    |    |  |   | 70.6    |    |
| Changesin operating assets andliabilities          |  |   | — |    |  |                  | 18.7    |                      |  |         | (33.7   | )       |  |   | (54.8   | )  |  |   | — |    |  |   | (69.8   | )  |
| Netcash provided by (used for) operatingactivities |  |   | — |    |  |                  | 12.8    |                      |  |         | 3.6     |         |  |   | 16.6    |    |  |   | (16.1   | )  |  |   | 16.9    |    |
|                                               |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |    |    |  |   |    |    |  |   |    |    |
| **Investingactivities**                            |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |    |    |  |   |    |    |  |   |    |    |
| Acquisitionof Ondeo NalcoGroup                     |  |   | — |    |  |                  | (3.2    | )                    |  |         | — |         |  |   | — |    |  |   | — |    |  |   | (3.2    | )  |
| Additionsto property, plant, and equipment,net     |  |   | — |    |  |                  | (4.4    | )                    |  |         | (2.0    | )       |  |   | (5.9    | )  |  |   | — |    |  |   | (12.3   | )  |
| Otherinvestingactivities                           |  |   | — |    |  |                  | (2.5    | )                    |  |         | 0.8     |         |  |   | (1.8    | )  |  |   | 1.9     |    |  |   | (1.6    | )  |
| Netcash provided by (used for) investingactivities |  |   | — |    |  |                  | (10.1   | )                    |  |         | (1.2    | )       |  |   | (7.7    | )  |  |   | 1.9     |    |  |   | (17.1   | )  |
|                                               |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |    |    |  |   |    |    |  |   |    |    |
| **Financingactivities**                            |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |    |    |  |   |    |    |  |   |    |    |
| Cashdividends                                      |  |   | — |    |  |                  | — |                      |  |         | (1.5    | )       |  |   | (14.6   | )  |  |   | 16.1    |    |  |   | — |    |
| Netborrowings (repayments) ofdebt                  |  |   | — |    |  |                  | (2.5    | )                    |  |         | 0.6     |         |  |   | 8.9     |    |  |   | (1.1    | )  |  |   | 5.9     |    |
| Capitalcontributions                               |  |   | — |    |  |                  | — |                      |  |         | — |         |  |   | 0.8     |    |  |   | (0.8    | )  |  |   | — |    |
| Otherfinancingactivities                           |  |   | — |    |  |                  | (1.3    | )                    |  |         | — |         |  |   | (2.7    | )  |  |   | — |    |  |   | (4.0    | )  |
| Netcash provided by (used for) financingactivities |  |   | — |    |  |                  | (3.8    | )                    |  |         | (0.9    | )       |  |   | (7.6    | )  |  |   | 14.2    |    |  |   | 1.9     |    |
| Effectof exchange rate changes oncash              |  |   | — |    |  |                  | — |                      |  |         | — |         |  |   | (0.5    | )  |  |   | — |    |  |   | (0.5    | )  |
| Increase(decrease) incash                          |  |   | — |    |  |                  | (1.1    | )                    |  |         | 1.5     |         |  |   | 0.8     |    |  |   | — |    |  |   | 1.2     |    |
| Cashat beginning ofperiod                          |  |   | — |    |  |                  | 1.3     |                      |  |         | 0.8     |         |  |   | 31.1    |    |  |   | — |    |  |   | 33.2    |    |
| Cashat end of period                               |  | $      | — |    |  | $                     | 0.2     |                      |  | $            | 2.3     |         |  | $      | 31.9    |    |  | $      | — |    |  | $      | 34.4    |    |
|                                                    |

17

----

Nalco Holdings LLC andSubsidiaries Condensed Consolidating Statement of Cash FlowsThree Months ended March 31, 2004(dollars inmillions)

|                                                    |  |        |         |         |  |                       |         |                           |  |              |         |              |  |        |         |         |  |        |         |         |  |        |        |         |  |  |
|----------------------------------------------------|--|--------|---------|---------|--|-----------------------|---------|---------------------------|--|--------------|---------|--------------|--|--------|---------|---------|--|--------|---------|---------|--|--------|--------|---------|--|--|
|                                               |  | Parent |         | Issuer  |  | GuarantorSubsidiaries |         | Non-GuarantorSubsidiaries |  | Eliminations |         | Consolidated |
| **Operatingactivities**                            |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |    |    |  |   |    |    |  |   |   |    |
| Netearnings(loss)                                  |  | $      | (119.0  | )  |  | $                     | (148.0  | )                    |  | $            | 10.7    |         |  | $      | 18.3    |    |  | $      | 119.0   |    |  | $      | (119.0 | )  |
| Non-cashadjustments                                |  |   | 119.0   |    |  |                  | 138.0   |                      |  |         | 24.9    |         |  |   | 18.3    |    |  |   | (119.0  | )  |  |   | 181.2  |    |
| Changesin operating assets andliabilities          |  |   | (4.0    | )  |  |                  | 18.3    |                      |  |         | 0.2     |         |  |   | 7.8     |    |  |   | — |    |  |   | 22.3   |    |
| Netcash provided by operatingactivities            |  |   | (4.0    | )  |  |                  | 8.3     |                      |  |         | 35.8    |         |  |   | 44.4    |    |  |   | — |    |  |   | 84.5   |    |
| **Investingactivities**                            |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |    |    |  |   |    |    |  |   |   |    |
| Acquisitionof Ondeo NalcoGroup                     |  |   | — |    |  |                  | 25.6    |                      |  |         | — |         |  |   | — |    |  |   | — |    |  |   | 25.6   |    |
| Additionsto property, plant, and equipment,net     |  |   | — |    |  |                  | (3.7    | )                    |  |         | (0.5    | )       |  |   | (12.2   | )  |  |   | — |    |  |   | (16.4  | )  |
| Otherinvestingactivities                           |  |   | — |    |  |                  | (2.5    | )                    |  |         | — |         |  |   | 0.3     |    |  |   | — |    |  |   | (2.2   | )  |
| Netcash provided by (used for) investingactivities |  |   | — |    |  |                  | 19.4    |                      |  |         | (0.5    | )       |  |   | (11.9   | )  |  |   | — |    |  |   | 7.0    |    |
| **Financingactivities**                            |  |   |    |    |  |                  |    |                      |  |         |    |         |  |   |    |    |  |   |    |    |  |   |   |    |
| Netborrowings (repayments) of long-termdebt        |  |   | — |    |  |                  | (33.5   | )                    |  |         | (32.8   | )       |  |   | 4.0     |    |  |   | — |    |  |   | (62.3  | )  |
| Netcash provided by (used for) financingactivities |  |   | — |    |  |                  | (33.5   | )                    |  |         | (32.8   | )       |  |   | 4.0     |    |  |   | — |    |  |   | (62.3  | )  |
| Effectof exchange rate changes oncash              |  |   | — |    |  |                  | — |                      |  |         | — |         |  |   | (0.4    | )  |  |   | — |    |  |   | (0.4   | )  |
| Increase(decrease) incash                          |  |   | (4.0    | )  |  |                  | (5.8    | )                    |  |         | 2.5     |         |  |   | 36.1    |    |  |   | — |    |  |   | 28.8   |    |
| Cashat beginning ofperiod                          |  |   | 4.0     |    |  |                  | 22.5    |                      |  |         | 1.8     |         |  |   | 71.7    |    |  |   | — |    |  |   | 100.0  |    |
| Cashat end of period                               |  | $      | — |    |  | $                     | 16.7    |                      |  | $            | 4.3     |         |  | $      | 107.8   |    |  | $      | — |    |  | $      | 128.8  |    |
|                                                    |

18

----

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

OnNovember 4, 2003, Nalco Holdings LLC, a company formed by TheBlackstone Group, Apollo Management, L.P. and GS Capital Partners (the"Sponsors"), purchased all of the outstandingshares of capital stock of Ondeo Nalco Company (which is now known asNalco Company) and the Nalco International SAS Subsidiaries, which hadbeen operated as a single business unit, from subsidiaries of Suez S.A.(Suez). In the following discussion and analysis, we refer to thisacquisition as the "Acquisition," and theterm "Transactions" means, collectively, theAcquisition and the related financings to fund the Acquisition.

The statements in the discussion and analysis regardingindustry outlook, our expectations regarding the performance of ourbusiness and the other non-historical statements in the discussion andanalysis are forward-looking statements. These forward-lookingstatements are subject to numerous risks and uncertainties. Our actualresults may differ materially from those contained in or implied by anyforward-looking statements. You should read the following discussiontogether with the consolidated financial statements of Nalco HoldingsLLC included elsewhere in this report.

"SafeHarbor" Statement Under Private Securities LitigationReform Act of 1995

This Quarterly Report for the fiscal quarterended March 31, 2005 (the "Quarterly Report")includes "forward-looking statements" withinthe meaning of Section 27A of the Securities Act of 1933 and Section21E of the Securities Exchange Act of 1934. These forward-lookingstatements include statements concerning our plans, objectives, goals,strategies, future events, future revenue or performance, capitalexpenditures, financing needs, plans or intentions relating toacquisitions, business trends and other information that is nothistorical information. When used 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 onflexibility in operating our business contained in our debtagreements; |

|              |                                                                          |
|--------------|--------------------------------------------------------------------------|
| •  | increases ininterest rates as a result of our variable rateindebtedness; |

|              |                                    |
|--------------|------------------------------------|
| •  | pricing pressurefrom ourcustomers; |

|              |                                     |
|--------------|-------------------------------------|
| •  | technological changeand innovation; |

|              |                                              |
|--------------|----------------------------------------------|
| •  | risksassociated with our non-U.S.operations; |

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

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

|              |                                                                |
|--------------|----------------------------------------------------------------|
| •  | adverse changes toenvironmental, health and safetyregulations; |

|              |                                               |
|--------------|-----------------------------------------------|
| •  | operating hazardsin our productionfacilities; |

|              |                                           |
|--------------|-------------------------------------------|
| •  | inability toachieve expected costsavings; |

|              |                                                   |
|--------------|---------------------------------------------------|
| •  | difficulties insecuring the raw materials we use; |

19

----

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

|              |                                                                                              |
|--------------|----------------------------------------------------------------------------------------------|
| •  | oursignificant pension benefit obligations and the current underfunding inour pension plans; |

|              |                                                               |
|--------------|---------------------------------------------------------------|
| •  | our abilityto realize the full value of our intangibleassets; |

|              |                                                                                                                                  |
|--------------|----------------------------------------------------------------------------------------------------------------------------------|
| •  | our ability to attractand retain skilled employees, particularly research scientists,technical sales professionals andengineers; |

|              |                                                            |
|--------------|------------------------------------------------------------|
| •  | our ability toprotect our intellectual property rights;and |

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

Theremay be other factors that may cause our actual results to differmaterially from the forward-looking statements.

Allforward-looking statements attributable to us or persons acting on ourbehalf apply only as of the date of this Quarterly Report and areexpressly qualified in their entirety by the cautionary statementsincluded in this Quarterly Report. We undertake no obligation to updateor revise forward-looking statements which may be made to reflectevents or circumstances that arise after the date made or to reflectthe occurrence of unanticipated events.

Executive LevelOverview

In the first quarter of 2005, sales increased9.0% to $777.6 million from $713.3 million reported for theyear-ago period. Net earnings turned to a positive $16.1 million fromthe year-ago loss of $119.0 million. Adjusted EBITDA, a non-GAAPmeasure used to determine compliance with the Company's debtcovenants, increased by 7.5% to $145.5 million from $135.3million.

Our first quarter sales and earnings results representprogress toward our 2005 goal of 5% sales growth on an organicbasis (after adjusting for the impacts of changes in foreign currencytranslation rates and acquisitions and divestitures) and double-digitAdjusted EBITDA growth.

Our sales growth consisted of4.7% organic growth, including 2.5% from pricing; a2.3% favorable impact from foreign currency translation ratechanges; and a 2.0% benefit from formation of the Katayama Nalcojoint venture in Japan. This growth was without about $10 million insales that was recognized in the fourth quarter 2004, resulting fromcustomers in Europe purchasing early to avoid any potentialcomplications from our conversion to a SAP system in that region onJanuary 1, 2005. We also believe customers pre-purchased in light ofshortages and price increases. Without this, we would not have been at8.5% organic growth in the fourth quarter of 2004. Real growth– organic growth less price increases that pass on raw materialcost increases – was 2.2% in the first quarter of 2005.Looking across the last three quarters, we remain confident of hittingour target of 5% growth above simply passing on highercosts.

Energy Services led the Company's sales growth,increasing 8.1% versus the first quarter of 2004, or 7.6%on an organic basis. Industrial and Institutional Services sales grew4.4%, or 2.7% organically and Paper Services increased3.8%, or 2.4% organically. Other segment sales more thandoubled, growing 22.9% organically on continuing strength inIndia and from a small alternate channels business group.

Geographically, we are improving sales most rapidly in the Pacific,Latin America, Eastern Europe, Africa and the Middle East.

Forthe first quarter of 2005, reductions to net earnings from businessprocess optimization, reimbursed profit sharing expense and otherunusual charges were $4.1 million pre-tax and $2.6 million on anafter-tax basis. The loss for the first quarter of 2004 was driven by anon-cash, one-time charge of $122.3 million for purchased in-processresearch and development expense.

Looking ahead, two issues areparticularly important for the Company to continue to address –pricing and operating working capital.

Pricing lagged behindrapid growth in raw material costs, pressuring the gross margin down to47.0% from the year-earlier 47.5%. However, the firstquarter of 2004 included a $14.1 million charge to cost 

20

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

of product sold, resulting from the sale ofinventory that had been revalued in purchase accounting. Without thisexpense, the gross margin would have been approximately 200 basispoints higher in the first quarter of 2004. In the first quarter ofthis year, we realized $18 million in added price increases but saw rawmaterial costs increase $34 million.

While mix issues played asmall role in our gross margin decline, the primary cause of thisyear-on-year drop is this gap between cost and price increases. On thepositive side, we are seeing customer acceptance of price increases inmost businesses. Looking forward, we expect total raw material costincreases for the year to total about $125 million. To date, we have inplace customer-accepted price increases that will recoup more than $85million. We are moving ahead with further increases in the second andthird quarters to close the remaining gap, including the May 4, 2005announcement of further increases for Paper Services customers. As wemove pricing, it is our intent to recapture the first quarter gap, aswell.

In all cases, we have tried to anticipate what we willneed, given what we currently know about cost increases. However, therate of raw material increases continues to go faster than our plans.Because of this, we would not be surprised to require additional pricehikes beyond what we are targeting in the second quarter of 2005.

We generated a sizable gain in cash earnings as compared to lastyear, but saw it consumed by a build in working capital, which presentsan opportunity for the balance of the year. Year-over-year, ourinventories have risen by more than $70 million, most of it sinceSeptember, as normal increases to support growth were exacerbated bycost increases, steps taken to navigate through select raw materialshortages, and issues associated with the aforementioned SAPimplementation. While we had made significant gains in ourinventory-days levels when management attention was focused on theissue in 2004, the shortage environment we entered in the fourthquarter 2004 was not the time to continue to pressure inventories down.Receivables have also increased nearly $65 million since September,driven by growth, but also affected by the SAP implementation.

These issues consumed the management resources that we mightotherwise have focused on improving inventory and receivables levels.We believe raw material shortages are now largely behind us, asadditional supply contracts were finalized in April. With this and SAPtransition issues behind us, we can refocus on not only recovering ourinventory-days and days-sales-outstanding back to September 2004levels, but on stepping beyond those levels with the benefit of acommon information technologies platform across 80% of ourbusiness. Payables have not been affected, and we have continued tobenefit from the work process redesign efforts we have put into thisarea. The absolute reduction to working capital we are set to achieve,even as revenues grow, is a major contributor to our expected Free CashFlow – which we define as cash from operations less minorityinterests and net capital expenditures – for this year. Asbefore, our Free Cash Flow is targeted for debt reduction.

Weremain confident that we will deliver on our $75 million cost savingscommitment for 2005. The $75 million in savings is designed to offsethigher compensation and benefit costs, normal inflationary costs,Sarbanes-Oxley compliance costs and the investments we are making inresearch and development and selling and service – while stilldelivering a bottom-line benefit. This also allows the full benefits ofour growth to flow through to our EBIT.

The variable rateportion of our debt amounted to $1.4 billion at March 31, 2005. Overthe first quarter, the average rate on term loan borrowings was4.6% and the average rate on all our debt was 6.5%. Weexpect cash interest payments for the year to be slightly above $210million. Near the end of the quarter, the Company executed a waiver andamendment of its trade-receivables securitization facility. The needfor a waiver stemmed from an increase in the level of past duereceivables, in particular those that have aged more than 60 days. Webelieve the rise in past due receivables is attributable to SAPimplementation issues and is not due to a deterioration in the creditquality of our receivables portfolio. As we continue to identify andresolve the underlying systems implementation issues, we expect to seeimprovement in past due receivables.

21

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

Beginning with the first quarter 2005,technical service work that had been previously reported in selling,administrative and research expenses was reported in cost of productsold. This change more accurately portrays the service nature ofcomponents of our offering. This change is expected to initiallyincrease cost of product sold and reduce selling, administrative andresearch expenses in an amount affecting gross margin by about 75 basispoints. The change is neutral at the operating earnings level, andreclassifications have been made to prior year data to conform to thispresentation. You will see a further gradual transition in thisdirection as we continue to grow, as our strategy includes dedicatingour sales engineers to high-value-added activities and letting aservices team perform the ongoing technical service.

Lookingahead, the Company estimates its effective tax rate in 2005 to be about43.0% and expects to make cash tax payments in an amountapproximating $100 million. These estimates do not give effect toliabilities on any dividend repatriations we might implement under theterms of the American Jobs Creation Act. We have made no decision onthis as yet, as we compare the benefits available to us under thislegislation to those under other strategies for global cash and debtmanagement.

Depreciation is expected to be between $135 and $140million this year, with the increase over last year's $114.3million largely due to the quick depreciation cycle for our SAPplatform. Depreciation on SAP is included in administrative expense andmasks some of the success we are having in lowering administrativecosts through work process redesign. Depreciation in future yearsshould decline rapidly as we continue to project that capitalexpenditures will remain at or below $100 million a year.

Webelieve we can hit our sales target of 5% growth over and abovethe impact of passing on raw material costs, while also beginning togain some benefits from alternate channels development. A small amountof our first quarter sales growth – less than 0.25%– can be attributed to alternate channels development. We aretargeting growth from alternate channels to be at a 2% annualrun rate by the end of 2006, which would bring our organic sales growthtarget to 7% as we enter 2007.

Results ofOperations

Net sales for the three months ended March 31, 2005and March 31, 2004 may be compared asfollows:

|                                        |  |                   |       |               |  |                                               |       |                     |  |                           |       |         |  |        |     |         |  |        |      |          |  |        |      |         |  |  |
|----------------------------------------|--|-------------------|-------|---------------|--|-----------------------------------------------|-------|---------------------|--|---------------------------|-------|---------|--|--------|-----|---------|--|--------|------|----------|--|--------|------|---------|--|--|
|                                   |  | ThreeMonths Ended |       |          |  | Attributable toChangesin the FollowingFactors |
| (dollars inmillions)                   |  | March 31, 2005    |       | March 31,2004 |  | % Change                                      |       | CurrencyTranslation |  | Acquisitions/Divestitures |       | Organic |
| Industrial & InstitutionalServices |  | $                 | 343.7 |          |  | $                                             | 329.3 |                |  |                      | 4.4   | %  |  |   | 2.0 | %  |  |   | (0.3 | )%  |  |   | 2.7  | %  |
| EnergyServices                         |  |              | 209.9 |          |  |                                          | 194.2 |                |  |                      | 8.1   | %  |  |   | 2.2 | %  |  |   | (1.7 | )%  |  |   | 7.6  | %  |
| PaperServices                          |  |              | 170.3 |          |  |                                          | 164.1 |                |  |                      | 3.8   | %  |  |   | 2.7 | %  |  |   | (1.3 | )%  |  |   | 2.4  | %  |
| Other                                  |  |              | 53.7  |          |  |                                          | 25.7  |                |  |                      | 108.9 | %  |  |   | 4.3 | %  |  |   | 81.7 | %   |  |   | 22.9 | %  |
| Netsales                               |  | $                 | 777.6 |          |  | $                                             | 713.3 |                |  |                      | 9.0   | %  |  |   | 2.3 | %  |  |   | 2.0  | %   |  |   | 4.7  | %  |
|                                        |

Netsales for the three months ended March 31, 2005 were $777.6million, a 9.0% increase over the $713.3 million reported forthe three months ended March 31, 2004. On an organic basis, whichexcludes the impacts of changes in foreign currency translation ratesand acquisitions and divestitures, net sales were up 4.7%. Thisimprovement was driven by favorable sales growth broadly spread acrossour customer base. The Energy Services division posted significantorganic growth in sales of 7.6% over the same period last year.The Industrial and Institutional Services division reported organicgrowth of 2.7%, as solid gains were posted by our global miningbusiness and our water treatment business in the Latin American andPacific regions. These gains were partly offset by lower sales reportedin Europe, which was the result of higher sales during the three monthsended December 31, 2004, as customers purchased in advance to avoidrisking any potential complications from our 

22

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

information systems conversion in that regionon January 1, 2005. Organically, Paper Services division sales were up2.4% compared to a year ago, reflecting continued strong growthin the Latin America and Pacific regions and a more modest gain inNorth America. Lower Paper Services sales in Europe, due to advancepurchases made by customers during the three months ended December 31,2004, partly offset these improvements. Most of the organic improvementin "other" sales was attributable to oursubsidiary company in India and alternate channel sales. The increasein "other" sales attributable toacquisitions/divestitures includes the incremental impact of ourJapanese joint venture, Katayama Nalco, which was formed with KatayamaChemical Inc. in June 2004 to accelerate our development in thisimportant industrialized market.

Gross profit**,**defined as the difference between net sales and cost of productsold, of $365.2 million for the three months ended March 31, 2005increased by $26.3 million, or 7.8%, over the $338.9 millionreported for the quarter ended March 31, 2004. On an organic basis andexcluding the impact of a $14.1 million charge to cost of product soldduring the three months ended March 31, 2004 resulting from the sale ofinventory that had been revalued at selling price less costs to sell inpurchase accounting at the date of the Acquisition, gross profitdecreased by $2.2 million. Increased sales volumes favorably impactedgross profit by approximately $15.5 million, but this was more thanoffset primarily by the impact of higher raw material costs. Grossprofit margin for the three months ended March 31, 2005 was47.0% compared to 47.5% for the year-ago period. Grossprofit margin for the three months ended March 31, 2004 was reducedapproximately 200 basis points as a result of the aforementioned $14.1million charge resulting from purchase accounting. The decrease ingross profit margin from a year ago was mostly the result of higher rawmaterial costs.

Selling, administrative, and researchexpenses for the three months ended March 31, 2005 of $258.5million increased by $5.2 million, or 2.1%, from $253.3 millionfor the three months ended March 31, 2004. On an organic basis,selling, administrative, and research expenses decreased by $5.4million, or 2.1%, reflecting further initiatives to reduce andcontrol spending.

Business optimization expenses,representing mostly employee severance and related costs associatedwith the continuing redesign and optimization of business and workprocesses, were $0.8 million for the three months ended March 31,2005.

Amortization of intangible assets was $20.6million and $24.2 million for the three months ended March 31, 2005 and2004, respectively. The decrease was attributable to lower amortizationof customer relationships, which are amortized using an acceleratedmethod.

In-process research and development was aone-time charge of $122.3 million recorded during the three monthsended March 31, 2004, as a result of purchase accounting entriesrelated to the Acquisition. The value of purchased IPR&D wascomprised of five ongoing development projects at the date of theAcquisition. Purchased IPR&D was derived by assigning values tothose projects identified by management as having economic value, butthat had not yet reached technological feasibility and had noalternative future use.

Other income (expense), net wasa net expense of $2.2 million and $3.5 million for the three monthsended March 31, 2005 and 2004, respectively. In November 2004, theCompany terminated the monitoring services provided to the Company byaffiliates of the Sponsors. Monitoring fees for such services were $2.5million for the three months ended March 31, 2004. The resultingfavorable variance was offset by a $2.4 million impairment chargerecorded during the three months ended March 31, 2005 related to abusiness held for sale.

Net interest expense, definedas the combination of interest income and interest expense, of $52.8million for the three months ended March 31, 2005 increased by $2.2million from the $50.6 million reported for the three months endedMarch 31, 2004. The impact of higher interest rates on variable rateborrowings more than offset the impact of a lower average debt levelcompared to the year-ago period.

23

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

The effective tax rate was 42.9% for the three months ended March 31, 2005. The rate variesfrom the U.S. statutory income tax rate of 35% due primarily tothe incremental tax on dividends received from non-U.S. subsidiaries,foreign taxes provided at less than the 35% U.S. statutory rate,U.S. state income taxes, nondeductible expenses, and other permanentdifferences.

These items contributed to the variation betweenthe U.S. statutory income tax rate and the Company's effectiveincome tax rate for the three months ended March 31, 2004. In addition,the effective rate was impacted by the charge for purchased IPR&D,which is not tax deductible.

Minority interest expensewas $0.2 million higher than the $1.0 million for the three monthsended March 31, 2004, reflecting improved results for most of theCompany's non-wholly owned subsidiaries.

Liquidity andCapital Resources

Operatingactivities.    Historically, the Company's main source ofliquidity has been its solid cash flow generated by operatingactivities. For the three months ended March 31, 2005, cash provided byoperating activities was $16.9 million, a $67.6 million decrease fromthe same period last year. This decrease primarily resulted from higherworking capital requirements attributable to increased inventory levelsand the payment of year-end incentive plan and commission accruals.

Investing activities.    Cash used for investingactivities was $17.1 million for the three months ended March 31, 2005,which was mostly attributable to net property additions of $12.3million.

Cash provided by investing activities was $7.0 millionfor the three months ended March 31, 2004. This was mostly the resultof a $25.6 million purchase price adjustment received from Suez relatedto the Acquisition, partly offset by net property additions of $16.4million.

Financing activities.    Net cash providedby financing activities totaled $1.9 million during the three monthsended March 31, 2005, which was mostly attributable to a net increasein borrowings.

Net cash used for financing activities totaled$62.3 million during the three months ended March 31, 2004. This wasprimarily comprised of repayment of borrowings.

Since theTransactions, we have been highly leveraged. Our liquidity requirementsare significant, primarily due to debt service requirements as well asresearch and development and capital investment. Our primary source ofliquidity will continue to be cash flow generated from operations, butwe also have availability under a $250 million revolving creditfacility and a $100 million receivables facility, in each case subjectto certain conditions. We believe that our financial position andfinancing structure will provide flexibility in worldwide financingactivities and permit us to respond to changing conditions in creditmarkets.

Senior credit facilities.     On November 4,2003, we entered into senior credit facilities which provided for arevolving credit facility, a $300 million six-year term loan A facility(which includes an €88.0 million tranche) which matures inNovember 2009 and a $1,300 million seven-year term loan B facilitywhich matures in November 2010. Borrowings under the senior creditfacilities bear interest at a floating base rate plus an applicablemargin. The applicable margin for borrowings under the revolving creditfacility and the term loan A facility is 1.50% with respect tobase rate borrowings and 2.50% with respect to LIBOR orEurocurrency borrowings and may be reduced subject to our attainingcertain leverage ratios. The applicable margin for borrowings under theterm loan B facility is 1.50% with respect to base rateborrowings and 2.00% with respect to LIBOR or Eurocurrencyborrowings. The applicable margin for borrowings under the term loan Bfacility is not subject to adjustment.

In addition to payinginterest on outstanding principal under the senior credit facilities,we are required to pay a commitment fee to the lenders under therevolving credit facility in respect of the unutilized commitments at arate equal to 0.50%. We also pay customary letter of creditfees.

The term loan A facility will amortize each year inquarterly amounts at a rate of 5% per annum in year one,10% per annum in year two, 15% per annum in year three,20% per annum in year four and 25% per annum in each ofyears five and six.

24

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

The term loan B facility will amortizeeach year in an amount equal to 1% per annum in equal quarterlyinstallments for the first six years and nine months, with theremaining amount payable on November 4, 2010.

At March 31, 2005,the outstanding balance of the term loan A and term loan B facilitieswas $214.4 million and $1,081.0 million, respectively.

Principalamounts outstanding under the revolving credit facility will be due andpayable in full at maturity on November 4, 2009. There were nooutstanding borrowings under the revolving credit facility as of March31, 2005.

The senior credit facilities contain a number ofcovenants that, among other things, restrict, subject to certainexceptions, our ability and the ability of our subsidiaries (includingNalco Company) to sell assets, incur additional indebtedness or issuepreferred stock, repay other indebtedness, pay dividends anddistributions or repurchase certain capital stock, create liens onassets, make investments, loans or advances, make certain acquisitions,engage in mergers or consolidations, enter into sale and leasebacktransactions, engage in certain transactions with affiliates, amendcertain material agreements governing our indebtedness, change thebusiness conducted by us and our subsidiaries (including Nalco Company)and enter into hedging agreements. In addition, the senior creditfacilities require Nalco Company to maintain the following significantfinancial covenants: a maximum total leverage ratio, a minimum interestcoverage ratio and a maximum capital expenditures limitation. We werein compliance with all covenants at March 31, 2005.

Seniornotes and senior subordinated notes.    As part of theTransactions in November 2003, Nalco Company issued $665 millionaggregate principal amount of 73⁄4% U.S. dollar-denominatedsenior notes due 2011, €200 million aggregate principalamount of 73⁄4% euro-denominated senior notes due 2011,$465 million aggregate principal amount of8 7/8% U.S. dollar-denominated seniorsubordinated notes due 2013 and €200 million aggregateprincipal amount of 9% euro-denominated senior subordinatednotes due 2013.

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

|              |                                |
|--------------|--------------------------------|
| •  | incur additional indebtedness; |

|              |                                                                                  |
|--------------|----------------------------------------------------------------------------------|
| •  | pay dividends on or make otherdistributions or repurchase certain capital stock; |

|              |                           |
|--------------|---------------------------|
| •  | make certain investments; |

|              |                                                          |
|--------------|----------------------------------------------------------|
| •  | enter into certain types oftransactions with affiliates; |

|              |                                                                  |
|--------------|------------------------------------------------------------------|
| •  | limit dividends or other paymentsby our restricted subsidiaries; |

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

|              |                                                           |
|--------------|-----------------------------------------------------------|
| •  | sell certainassets or merge with or into other companies. |

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

Covenant compliance.    The breach of covenants in oursenior credit agreement that are tied to ratios based on AdjustedEBITDA could result in a default under that agreement and the lenderscould elect to declare all amounts borrowed due and payable. Any suchacceleration would also result in a default under our indentures.Additionally, under our debt agreements, our ability to engage inactivities such as incurring additional indebtedness, makinginvestments and paying dividends is also tied to ratios based onAdjusted EBITDA.

Adjusted EBITDA is used to determine ourcompliance with many of the covenants contained in the indenturesgoverning the notes and in our senior credit agreement. Adjusted EBITDAis defined as 

25

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

EBITDA further adjusted to exclude unusualitems and other adjustments permitted in calculating covenantcompliance under the indentures 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.

Adjusted EBITDA is calculated asfollows:

|                                  |  |                                 |       |                                 |  |        |         |         |  |  |
|----------------------------------|--|---------------------------------|-------|---------------------------------|--|--------|---------|---------|--|--|
| (dollarsin millions)             |  | Three MonthsendedMarch 31, 2005 |       | Three Monthsended March 31,2004 |
| Net earnings(loss)               |  | $                               | 16.1  |                            |  | $      | (119.0  | )  |
| Interest,net                     |  |                            | 52.8  |                            |  |   | 50.6    |    |
| Income taxprovision              |  |                            | 13.0  |                            |  |   | 3.0     |    |
| Depreciation                     |  |                            | 33.2  |                            |  |   | 28.7    |    |
| Amortization                     |  |                            | 20.6  |                            |  |   | 24.2    |    |
| EBITDA                           |  | $                               | 135.7 |                            |  | $      | (12.5   | )  |
| Non-cashcharges (1)              |  |                            | 10.1  |                            |  |   | 145.4   |    |
| Businessoptimization expenses(2) |  |                            | 0.8   |                            |  |   | — |    |
| Unusual items(3)                 |  |                            | 0.7   |                            |  |   | 1.1     |    |
| Other adjustments(4)             |  |                            | (1.8  | )                          |  |   | 1.3     |    |
| AdjustedEBITDA                   |  | $                               | 145.5 |                            |  | $      | 135.3   |    |
|                                  |

(1)Non-cash charges are further detailed on the followingtable:

|                                                |  |                                 |         |                                 |  |        |         |        |  |  |
|------------------------------------------------|--|---------------------------------|---------|---------------------------------|--|--------|---------|--------|--|--|
| (dollarsin millions)                           |  | Three MonthsendedMarch 31, 2005 |         | Three Monthsended March 31,2004 |
| In-process research and development            |  | $                               | — |                            |  | $      | 122.3   |   |
| Inventorystep-up                               |  |                            | — |                            |  |   | 14.1    |   |
| Assetwrite-offs                                |  |                            | 2.4     |                            |  |   | — |   |
| Profitsharing expense and 401(k) funded bySuez |  |                            | 5.6     |                            |  |   | 6.1     |   |
| Other                                          |  |                            | 2.1     |                            |  |   | 2.9     |   |
| Non-cashcharges                                |  | $                               | 10.1    |                            |  | $      | 145.4   |   |
|                                                |

In-processResearch and Development

In-process researchand development was a one time charge of $122.3 million recorded duringthe three months ended March 31, 2004, as a result of purchaseaccounting entries related to the Acquisition.

InventoryStep-Up

As a result of purchase accountingfor the Acquisition, we wrote up our inventory to fair value andsubsequently charged the write up to cost of sales as the inventory wassold.

Profit Sharing and 401(k) Expense Funded by Suez

In conjunction with the Acquisition, we enteredinto an agreement with Suez whereby Suez will reimburse us for certainprofit-sharing and 401(k) matching contributions made by us to theProfit-Sharing Trust.

26

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

Other

Othernon-cash charges include the non-cash impact on earnings of our equityinvestments and minority interests. Non-cash charges also includes thenon-cash portion of rent expense under the sublease that we enteredinto with Suez in conjunction with the Acquisition.

|           |                                                                                                                                                                |
|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)  | Business optimization expenses for 2005include costs associated with the redesign and optimization of workprocesses. See note 7 to Item 1 for moreinformation. |

|           |                                                          |
|-----------|----------------------------------------------------------|
| (3)  | Unusual items are furtherdetailed on the followingtable: |

|                                      |  |                                 |     |                                 |  |        |         |        |  |  |
|--------------------------------------|--|---------------------------------|-----|---------------------------------|--|--------|---------|--------|--|--|
| (dollarsin millions)                 |  | Three MonthsendedMarch 31, 2005 |     | Three Monthsended March 31,2004 |
| Loss (gain) on sales, net ofexpenses |  | $                               | 0.5 |                            |  | $      | — |   |
| Other unusualitems(a)                |  |                            | 0.2 |                            |  |   | 1.1     |   |
|                                 |  | $                               | 0.7 |                            |  | $      | 1.1     |   |
|                                      |

|  |     |                                                                           |
|--|-----|---------------------------------------------------------------------------|
|  | (a) | Otherunusual items include certain costs associated with theTransactions. |

|           |                                                                                                                                           |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------|
| (4)  | We are required tomake adjustments to EBITDA for monitoring fees paid to the Sponsors,franchise taxes, and 401(k) matching contributions. |

Our covenantlevels and ratios for the four quarters ended March 31, 2005 are asfollows:

|                                                                                                            |  |                                |        |        |  |        |        |        |  |  |
|------------------------------------------------------------------------------------------------------------|--|--------------------------------|--------|--------|--|--------|--------|--------|--|--|
|                                                                                                       |  | CovenantLevel at March 31,2005 |        | Ratios |
| **Senior creditfacility**(1)                                                                               |  |                           |   |   |  |   |   |   |
| MinimumAdjusted EBITDA to cash interestratio                                                               |  |                           | 1.70x  |   |  |   | 3.02x  |   |
| Maximum net debtto Adjusted EBITDAratio                                                                    |  |                           | 6.50x  |   |  |   | 5.14x  |   |
| **Indentures**(2)                                                                                          |  |                           |   |   |  |   |   |   |
| Minimum Adjusted EBITDA tofixed charge ratio required to incur additional debt pursuant to ratioprovisions |  |                           | 2.00x  |   |  |   | 3.02x  |   |
|                                                                                                            |

|  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (1) | During2005, our senior credit facility requires us to maintain an AdjustedEBITDA to cash interest ratio at a minimum of 1.70x and a net debt toAdjusted EBITDA ratio at a maximum of 6.50x, in each case for the mostrecent four quarter period. Failure to satisfy these ratio requirementswould constitute a default under the senior credit agreement. If ourlenders failed to waive any such default, our repayment obligationsunder the senior credit agreement could be accelerated, which wouldalso constitute a default under ourindentures. |

|  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (2) | Our ability to incuradditional 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 $1,295.4million that was outstanding under our term loan facilities as of March31, 2005) and investments in similar business and other investmentsequal to 6% of Nalco Holdings LLC consolidated assets. |

Local lines of credit.    Certain of our non-U.S.subsidiaries have lines of credit to support local requirements. As ofMarch 31, 2005, the aggregate outstanding balance under these locallines of 

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

credit was approximately $25.0 million.Certain of these lines of credit are equally and ratably secured withobligations under our senior credit facilities.

Receivablesfacility.    Nalco Company entered into a receivables facility onJune 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.

Availability of funding under thereceivables facility depends primarily upon the outstanding tradeaccounts receivable balance from time to time. Aggregate availabilityis determined by using a formula that reduces the gross receivablesbalance by factors that take into account historical default anddilution rates, excessive concentrations and average days outstandingand the costs of the facility. Based on the terms of this facility andon the criteria described above, as of March 31, 2005, approximately$167.2 million of our accounts receivable balance was consideredeligible for financing under the program, of which approximately $96.0million would have been available for funding. As of March 31, 2005, wehad $95.2 million of outstanding borrowings under this facility.

This facility is treated as a general financing agreement resultingin the funding and related receivables being shown as liabilities andassets, respectively, on our consolidated balance sheet and the costsassociated with the receivables facility being recorded as interestexpense.

|               |                                                           |
|---------------|-----------------------------------------------------------|
| Item 3.  | Quantitative andQualitative Disclosures About Market Risk |

There have been nomaterial changes to the Company's exposures to market risk sinceDecember 31, 2004.

|               |                        |
|---------------|------------------------|
| Item 4.  | Controls andProcedures |

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

The Company's chiefexecutive officer and chief financial officer, after evaluating theeffectiveness of the Company's "disclosure controlsand procedures" (as defined in the Securities Exchange Actof 1934 Rules 13a-15(e) and 15d-15(e)) as of the end of the period,have concluded that the Company's disclosure controls andprocedures were adequate and designed to ensure that materialinformation relating to the Company and its consolidated subsidiarieswould be made known to them by others within those entities asappropriate to allow timely decisions regarding requireddisclosures.

|           |                                                       |
|-----------|-------------------------------------------------------|
| (b)  | Changes in internalcontrols over financial reporting. |

There were no changes in theCompany's internal controls over financial reporting thatoccurred during the first quarter of 2005 that have materiallyaffected, or are reasonably likely to materially affect, theCompany's internal controls over financialreporting.

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PART II.    OTHER INFORMATION

|               |          |
|---------------|----------|
| Item 6.  | Exhibits |

|           |                                   |
|-----------|-----------------------------------|
| (a)  | The following are includedherein: |

|                     |                                                                                                   |
|---------------------|---------------------------------------------------------------------------------------------------|
| Exhibit 31.1   | Certification of ChiefExecutive Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of2002 |

|                     |                                                                                                   |
|---------------------|---------------------------------------------------------------------------------------------------|
| Exhibit 31.2   | Certification of ChiefFinancial Officer, Pursuant to Section 302 of the Sarbanes-Oxley Act of2002 |

|                     |                                                                                                                       |
|---------------------|-----------------------------------------------------------------------------------------------------------------------|
| Exhibit 32.1   | Certifications Pursuant to18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of theSarbanes-Oxley Act of 2002 |

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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/ BRADLEYJ.BELL                                        Name:  Bradley J. Bell Title:    Executive Vice Presidentand              Chief Financial Officer |
|--|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Dated: May 12, 2005

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