Table of Contents

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UNITEDSTATESSECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

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FORM 10-Q

(Mark One)

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|--------|----------------------------------------------------------------------------------------|
|   | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934 |

For thequarterly period ended June  30,  2006

or

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|--------|-----------------------------------------------------------------------------------------|
|   | TRANSITION REPORT PURSUANT TO SECTION13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |

For the transition periodfrom            to            .

Commission File No. 333-115560-15

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NALCO HOLDINGSLLC

(Exact name of registrant asspecified in its charter)

|                                                              |  |  |                                       |
|--------------------------------------------------------------|--|--|---------------------------------------|
| Delaware                                                     |  |  | 73-1683500                            |
| (Stateor other jurisdiction ofIncorporation or Organization) |  |  | (I.R.S. EmployerIdentificationNumber) |
|                                                              |

1601 West Diehl RoadNaperville, IL60563-1198(630) 305-1000

(Address,Including Zip Code, and Telephone Number, Including Area Code, ofRegistrant’s Principal Executive Offices)

Notapplicable

(Former name, formeraddress and former fiscal year, if changed since last report)

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

Indicate bycheck mark whether the registrant is a large accelerated filer, anaccelerated filer, or a non-accelerated filer. See definition of‘‘accelerated filer and large acceleratedfiler’’ in Rule 12b-2 of the Exchange Act. (Check one):

|                         |  |  |                   |  |  |                       |
|-------------------------|--|--|-------------------|--|--|-----------------------|
| Large accelerated filer |  |  | Accelerated filer |  |  | Non-accelerated filer |
|                         |

Indicate by check mark whether theregistrant is a shell company (as defined in Rule 12-b-2 of theExchange Act). Yes     No  

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QUARTERLY REPORTON FORM 10-QNALCO HOLDINGS LLCQuarter Ended June30,  2006

TABLE OF CONTENTS

|                              |  |  |                                                                                                                |  |        |  |  |        |  |
|------------------------------|--|--|----------------------------------------------------------------------------------------------------------------|--|--------|--|--|--------|--|
| Part I. FinancialInformation |  |  |                                                                                                                |  |   |  |
| Item1.                       |  |  | FinancialStatements                                                                                            |  |        |  |  |   |  |
|                         |  |  | Condensed Consolidated BalanceSheets – June 30, 2006 and December 31,2005                                |  |        |  |  | 2      |  |
|                         |  |  | Condensed ConsolidatedStatements of Operations – Three months and six months endedJune 30, 2006 and 2005 |  |        |  |  | 3      |  |
|                         |  |  | Condensed Consolidated Statements of Cash Flows –Six months ended June 30, 2006 and 2005                 |  |        |  |  | 4      |  |
|                         |  |  | Notes to Condensed ConsolidatedFinancial Statements – June 30, 2006                                      |  |        |  |  | 5      |  |
| Item 2.                      |  |  | Management’sDiscussion and Analysis of Financial Condition and Results ofOperations                      |  |        |  |  | 21     |  |
| Item3.                       |  |  | Quantitative and Qualitative Disclosures About MarketRisk                                                      |  |        |  |  | 34     |  |
| Item 4.                      |  |  | Controlsand Procedures                                                                                         |  |        |  |  | 34     |  |
| PartII. Other Information    |  |  |                                                                                                           |
| Item1A.                      |  |  | Risk Factors                                                                                                   |  |        |  |  | 35     |  |
| Item6.                       |  |  | Exhibits                                                                                                       |  |        |  |  | 36     |  |
| Signature                    |  |  |                                                                                                                |  | 37     |  |
|                              |

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PART I. FINANCIALINFORMATION

|               |                     |
|---------------|---------------------|
| Item 1.  | FinancialStatements |

Nalco Holdings LLC and SubsidiariesCondensedConsolidated Balance Sheets(dollars inmillions)

|                                                                        |  |  |                         |   |         |                 |  |  |  |   |         |  |
|------------------------------------------------------------------------|--|--|-------------------------|---|---------|-----------------|--|--|--|---|---------|--|
|                                                                   |  |  | (Unaudited)June30, 2006 |   |         | December31,2005 |
| Assets                                                                 |  |  |                         |   |    |                 |  |  |  |   |    |  |
| Currentassets:                                                         |  |  |                         |   |    |                 |  |  |  |   |    |  |
| Cash and cashequivalents                                               |  |  |                         | $ | 31.6    |                 |  |  |  | $ | 30.8    |  |
| Accountsreceivable, less allowances of $19.5 in 2006 and $16.6 in 2005 |  |  |                         |   | 639.8   |                 |  |  |  |   | 622.3   |  |
| Inventories:                                                           |  |  |                         |   |    |                 |  |  |  |   |    |  |
| Finishedproducts                                                       |  |  |                         |   | 268.0   |                 |  |  |  |   | 242.6   |  |
| Materialsand work inprocess                                            |  |  |                         |   | 75.5    |                 |  |  |  |   | 70.6    |  |
|                                                                   |  |  |                         |   | 343.5   |                 |  |  |  |   | 313.2   |  |
| Prepaidexpenses, taxes and other currentassets                         |  |  |                         |   | 65.2    |                 |  |  |  |   | 83.1    |  |
| Totalcurrentassets                                                     |  |  |                         |   | 1,080.1 |                 |  |  |  |   | 1,049.4 |  |
| Property,plant, and equipment,net                                      |  |  |                         |   | 746.7   |                 |  |  |  |   | 755.3   |  |
| Intangibleassets:                                                      |  |  |                         |   |    |                 |  |  |  |   |    |  |
| Goodwill                                                               |  |  |                         |   | 2,257.8 |                 |  |  |  |   | 2,196.7 |  |
| Otherintangibles,net                                                   |  |  |                         |   | 1,200.8 |                 |  |  |  |   | 1,227.5 |  |
| Otherassets                                                            |  |  |                         |   | 323.1   |                 |  |  |  |   | 325.3   |  |
| Totalassets                                                            |  |  |                         | $ | 5,608.5 |                 |  |  |  | $ | 5,554.2 |  |
| Liabilitiesand unitholder’sequity                                |  |  |                         |   |    |                 |  |  |  |   |    |  |
| Currentliabilities:                                                    |  |  |                         |   |    |                 |  |  |  |   |    |  |
| Accountspayable                                                        |  |  |                         | $ | 272.3   |                 |  |  |  | $ | 285.4   |  |
| Short-termdebt                                                         |  |  |                         |   | 135.1   |                 |  |  |  |   | 22.6    |  |
| Other currentliabilities                                               |  |  |                         |   | 219.5   |                 |  |  |  |   | 235.1   |  |
| Totalcurrentliabilities                                                |  |  |                         |   | 626.9   |                 |  |  |  |   | 543.1   |  |
| Otherliabilities:                                                      |  |  |                         |   |    |                 |  |  |  |   |    |  |
| Long-termdebt                                                          |  |  |                         |   | 2,806.6 |                 |  |  |  |   | 2,890.7 |  |
| Deferredincometaxes                                                    |  |  |                         |   | 370.9   |                 |  |  |  |   | 380.7   |  |
| Accruedpensionbenefits                                                 |  |  |                         |   | 385.1   |                 |  |  |  |   | 416.4   |  |
| Otherliabilities                                                       |  |  |                         |   | 283.4   |                 |  |  |  |   | 278.9   |  |
| Minorityinterest                                                       |  |  |                         |   | 14.0    |                 |  |  |  |   | 11.2    |  |
| Unitholder’sequity                                               |  |  |                         |   | 1,121.6 |                 |  |  |  |   | 1,033.2 |  |
| Totalliabilities and unitholder’sequity                          |  |  |                         | $ | 5,608.5 |                 |  |  |  | $ | 5,554.2 |  |
|                                                                        |

Seeaccompanying notes to condensed consolidated financialstatements.

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

|                                                          |  |  |                                |   |        |                                |  |  |                              |   |        |                              |  |  |  |   |         |   |  |  |  |   |         |   |
|----------------------------------------------------------|--|--|--------------------------------|---|--------|--------------------------------|--|--|------------------------------|---|--------|------------------------------|--|--|--|---|---------|---|--|--|--|---|---------|---|
|                                                     |  |  | ThreeMonthsended June 30, 2006 |   |        | Three MonthsendedJune 30, 2005 |  |  | Six Monthsended June 30,2006 |   |        | Six Monthsended June 30,2005 |
| Netsales                                                 |  |  |                                | $ | 891.0  |                                |  |  |                              | $ | 836.3  |                              |  |  |  | $ | 1,740.4 |   |  |  |  | $ | 1,613.9 |   |
| Operatingcosts andexpenses:                              |  |  |                                |   |   |                                |  |  |                              |   |   |                              |  |  |  |   |    |   |  |  |  |   |    |   |
| Costof productsold                                       |  |  |                                |   | 495.6  |                                |  |  |                              |   | 480.3  |                              |  |  |  |   | 966.7   |   |  |  |  |   | 893.1   |   |
| Selling,administrative, and researchexpenses             |  |  |                                |   | 270.7  |                                |  |  |                              |   | 262.9  |                              |  |  |  |   | 546.1   |   |  |  |  |   | 521.0   |   |
| Amortizationof intangibleassets                          |  |  |                                |   | 17.5   |                                |  |  |                              |   | 20.5   |                              |  |  |  |   | 34.8    |   |  |  |  |   | 41.1    |   |
| Businessoptimizationexpenses                             |  |  |                                |   | 1.8    |                                |  |  |                              |   | 17.0   |                              |  |  |  |   | 5.6     |   |  |  |  |   | 17.8    |   |
| Totaloperating costs andexpenses                         |  |  |                                |   | 785.6  |                                |  |  |                              |   | 780.7  |                              |  |  |  |   | 1,553.2 |   |  |  |  |   | 1,473.0 |   |
| Operatingearnings                                        |  |  |                                |   | 105.4  |                                |  |  |                              |   | 55.6   |                              |  |  |  |   | 187.2   |   |  |  |  |   | 140.9   |   |
| Otherincome (expense),net                                |  |  |                                |   | (1.9   | )                              |  |  |                              |   | (0.6   | )                            |  |  |  |   | (0.6    | ) |  |  |  |   | (2.8    | ) |
| Interestincome                                           |  |  |                                |   | 2.3    |                                |  |  |                              |   | 2.0    |                              |  |  |  |   | 4.0     |   |  |  |  |   | 4.1     |   |
| Interestexpense                                          |  |  |                                |   | (60.1  | )                              |  |  |                              |   | (57.6  | )                            |  |  |  |   | (118.6  | ) |  |  |  |   | (112.5  | ) |
| Earnings(loss) before income taxes and minorityinterests |  |  |                                |   | 45.7   |                                |  |  |                              |   | (0.6   | )                            |  |  |  |   | 72.0    |   |  |  |  |   | 29.7    |   |
| Incometax provision(benefit)                             |  |  |                                |   | 17.1   |                                |  |  |                              |   | (0.1   | )                            |  |  |  |   | 28.1    |   |  |  |  |   | 12.9    |   |
| Minorityinterests                                        |  |  |                                |   | (1.8   | )                              |  |  |                              |   | (1.6   | )                            |  |  |  |   | (3.5    | ) |  |  |  |   | (2.8    | ) |
| Netearnings(loss)                                        |  |  |                                | $ | 26.8   |                                |  |  |                              | $ | (2.1   | )                            |  |  |  | $ | 40.4    |   |  |  |  | $ | 14.0    |   |
|                                                          |

Seeaccompanying notes to condensed consolidated financialstatements.

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

|                                                                                   |  |  |                              |   |         |                               |  |  |  |   |        |   |
|-----------------------------------------------------------------------------------|--|--|------------------------------|---|---------|-------------------------------|--|--|--|---|--------|---|
|                                                                              |  |  | Sixmonths endedJune 30, 2006 |   |         | Six months endedJune 30, 2005 |
| Operatingactivities                                                               |  |  |                              |   |    |                               |  |  |  |   |   |   |
| Netearnings                                                                       |  |  |                              | $ | 40.4    |                               |  |  |  | $ | 14.0   |   |
| Adjustmentsto reconcile net earnings to net cash provided by operatingactivities: |  |  |                              |   |    |                               |  |  |  |   |   |   |
| Depreciation                                                                      |  |  |                              |   | 64.7    |                               |  |  |  |   | 66.7   |   |
| Amortization                                                                      |  |  |                              |   | 34.8    |                               |  |  |  |   | 41.1   |   |
| Amortizationof deferred financing costs                                           |  |  |                              |   | 5.4     |                               |  |  |  |   | 5.5    |   |
| Other                                                                             |  |  |                              |   | (29.7   | )                             |  |  |  |   | 9.0    |   |
| Changesin operating assets andliabilities                                         |  |  |                              |   | (53.8   | )                             |  |  |  |   | (105.9 | ) |
| Netcash provided by operatingactivities                                           |  |  |                              |   | 61.8    |                               |  |  |  |   | 30.4   |   |
| Investingactivities                                                               |  |  |                              |   |    |                               |  |  |  |   |   |   |
| Purchase priceadjustment on acquisition of Ondeo NalcoGroup                       |  |  |                              |   | — |                               |  |  |  |   | (3.2   | ) |
| Additions toproperty, plant, and equipment,net                                    |  |  |                              |   | (37.5   | )                             |  |  |  |   | (25.0  | ) |
| Other                                                                             |  |  |                              |   | (4.4    | )                             |  |  |  |   | (0.6   | ) |
| Netcash used for investingactivities                                              |  |  |                              |   | (41.9   | )                             |  |  |  |   | (28.8  | ) |
| Financingactivities                                                               |  |  |                              |   |    |                               |  |  |  |   |   |   |
| Changes inshort-term debt,net                                                     |  |  |                              |   | 28.1    |                               |  |  |  |   | 4.4    |   |
| Proceeds from long-termdebt                                                       |  |  |                              |   | — |                               |  |  |  |   | 24.1   |   |
| Repayments oflong-termdebt                                                        |  |  |                              |   | (45.5   | )                             |  |  |  |   | (18.2  | ) |
| Other                                                                             |  |  |                              |   | (2.2    | )                             |  |  |  |   | (4.4   | ) |
| Netcash provided by (used for) financingactivities                                |  |  |                              |   | (19.6   | )                             |  |  |  |   | 5.9    |   |
| Effect ofexchange rate changes on cash and cashequivalents                        |  |  |                              |   | 0.5     |                               |  |  |  |   | (1.3   | ) |
| Increasein cash and cashequivalents                                               |  |  |                              |   | 0.8     |                               |  |  |  |   | 6.2    |   |
| Cash and cashequivalents at beginning ofperiod                                    |  |  |                              |   | 30.8    |                               |  |  |  |   | 33.2   |   |
| Cashand cash equivalents at end ofperiod                                          |  |  |                              | $ | 31.6    |                               |  |  |  | $ | 39.4   |   |
|                                                                                   |

Seeaccompanying notes to condensed consolidated financialstatements.

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Nalco Holdings LLCand SubsidiariesNotes to Condensed Consolidated FinancialStatements(Unaudited)

June  30,2006

|          |                                                |
|----------|------------------------------------------------|
| 1.  | Description of Business and Change inOwnership |

Description of Business

NalcoHoldings LLC and subsidiaries (the Company) is engaged in the worldwidemanufacture and sale of highly specialized service chemical programs.This includes production and service related to the sale andapplication of chemicals and technology used in water treatment,pollution control, energy conservation, oil production and refining,steelmaking, papermaking, mining, and other industrialprocesses.

Change in Ownership

OnNovember  4,  2003, Nalco Holdings LLC (the Buyer), anewly-formed entity controlled by 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 itsaffiliates, acquired the net assets of Ondeo Nalco Group for$4,127.1  million, including direct costs of the acquisition of$125.6  million, excluding assumed debt of $30.2  million,and subject to certain closing and post-closing adjustments (theAcquisition).

|          |                       |
|----------|-----------------------|
| 2.  | Basis of Presentation |

These condensed consolidated financial statements should beread in conjunction with the consolidated and combined financialstatements and notes thereto included in the Annual Report for NalcoHoldings LLC and subsidiaries for the fiscal year ended December31,  2005.

The accompanying unaudited condensedconsolidated financial statements have been prepared in accordance withgenerally accepted accounting principles for interim financialinformation. Accordingly, they do not include all of the informationand footnotes required by accounting principles generally accepted inthe United States for complete financial statements. Managementbelieves these financial statements include all normal recurringadjustments considered necessary for a fair presentation of thefinancial position and results of operations of the Company. Operatingresults for the six months ended June  30,  2006 are notnecessarily indicative of results that may be expected for the yearended December  31,  2006.

Certainreclassifications have been made to the prior year data to conform tothe current year presentation which had no effect on net earningsreported for any period.

|          |                                     |
|----------|-------------------------------------|
| 3.  | Goodwill and Other IntangibleAssets |

The changes in goodwill for the period were asfollows:

|                                             |  |  |        |   |         |   |
|---------------------------------------------|--|--|--------|---|---------|---|
| (dollarsin millions)                        |  |  |   |
| Balance as of December31,  2005             |  |  |        | $ | 2,196.7 |   |
| Adjustments todeferred income taxes         |  |  |        |   | (1.5    | ) |
| Excess accrualsfor costs to exit activities |  |  |        |   | (1.0    | ) |
| Effect offoreign currencytranslation        |  |  |        |   | 63.6    |   |
| Balanceas of June  30,2006                  |  |  |        | $ | 2,257.8 |   |
|                                             |

Inconjunction with the Acquisition, the Company recorded liabilities of$35.5  million, primarily for employee severance and relatedcosts, in connection with a plan to exit or restructure certainactivities. As of December  31,  2005, the remainingbalance of the accrual was $2.5  million. During the

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six months ended June  30,  2006,an additional $1.1  million of severance costs was chargedagainst the accrual. The remaining $1.4  million represented anexcess accrual that was written off to goodwill, net of the relateddeferred tax asset of $0.4  million.

The followingtable reflects intangible assets and related amortizationinformation:

|                                              |  |  |                    |   |         |                         |  |  |             |   |         |                         |  |  |  |   |         |  |  |  |  |   |         |   |
|----------------------------------------------|--|--|--------------------|---|---------|-------------------------|--|--|-------------|---|---------|-------------------------|--|--|--|---|---------|--|--|--|--|---|---------|---|
|                                         |  |  | Asof June 30, 2006 |   |         | As of December 31,2005  |
| (dollarsinmillions)                          |  |  | GrossAmount        |   |         | AccumulatedAmortization |  |  | GrossAmount |   |         | AccumulatedAmortization |
| Intangibleassets subject toamortization:     |  |  |                    |   |    |                         |  |  |             |   |    |                         |  |  |  |   |    |  |  |  |  |   |    |   |
| Customerrelationships                        |  |  |                    | $ | 499.3   |                         |  |  |             | $ | (204.2  | )                       |  |  |  | $ | 486.4   |  |  |  |  | $ | (169.8  | ) |
| Patentsand developedtechnology               |  |  |                    |   | 100.5   |                         |  |  |             |   | (27.2   | )                       |  |  |  |   | 100.5   |  |  |  |  |   | (22.2   | ) |
| Other                                        |  |  |                    |   | 2.2     |                         |  |  |             |   | (0.3    | )                       |  |  |  |   | 2.4     |  |  |  |  |   | (0.3    | ) |
| Intangibleassets not subject toamortization: |  |  |                    |   |    |                         |  |  |             |   |    |                         |  |  |  |   |    |  |  |  |  |   |    |   |
| Trademarksand tradenames                     |  |  |                    |   | 830.0   |                         |  |  |             |   | — |                         |  |  |  |   | 830.0   |  |  |  |  |   | — |   |
| Pensionasset                                 |  |  |                    |   | 0.5     |                         |  |  |             |   | — |                         |  |  |  |   | 0.5     |  |  |  |  |   | — |   |
|                                         |  |  |                    | $ | 1,432.5 |                         |  |  |             | $ | (231.7  | )                       |  |  |  | $ | 1,419.8 |  |  |  |  | $ | (192.3  | ) |
|                                              |

|    |      |
|----|------|
| 4. | Debt |

Debtconsists of thefollowing:

|                                              |  |  |             |   |         |                 |  |  |  |   |         |  |
|----------------------------------------------|--|--|-------------|---|---------|-----------------|--|--|--|---|---------|--|
| (dollarsin millions)                         |  |  | June30,2006 |   |         | December31,2005 |
| Short-term                                   |  |  |             |   |    |                 |  |  |  |   |    |  |
| Checksoutstanding and bankoverdrafts         |  |  |             | $ | 23.6    |                 |  |  |  | $ | 17.9    |  |
| Notes payableto banks                        |  |  |             |   | 1.9     |                 |  |  |  |   | 0.9     |  |
| Current maturitiesof long-termdebt           |  |  |             |   | 11.9    |                 |  |  |  |   | 3.8     |  |
| Securitized tradeaccounts receivablefacility |  |  |             |   | 72.7    |                 |  |  |  |   | — |  |
| Revolvingcreditfacility                      |  |  |             |   | 25.0    |                 |  |  |  |   | — |  |
|                                         |  |  |             | $ | 135.1   |                 |  |  |  | $ | 22.6    |  |
| Long-term                                    |  |  |             |   |    |                 |  |  |  |   |    |  |
| Securitizedtrade accounts receivablefacility |  |  |             | $ | — |                 |  |  |  | $ | 75.3    |  |
| Term loanA, due November2009                 |  |  |             |   | 78.5    |                 |  |  |  |   | 107.6   |  |
| Term loan B, dueNovember2010                 |  |  |             |   | 1,071.0 |                 |  |  |  |   | 1,081.0 |  |
| Senior notes,due November2011                |  |  |             |   | 920.1   |                 |  |  |  |   | 900.7   |  |
| Senior subordinatednotes, due November2013   |  |  |             |   | 720.1   |                 |  |  |  |   | 700.7   |  |
| Unsecured notes,due May2008                  |  |  |             |   | 27.8    |                 |  |  |  |   | 27.8    |  |
| Other                                        |  |  |             |   | 1.0     |                 |  |  |  |   | 1.4     |  |
|                                         |  |  |             |   | 2,818.5 |                 |  |  |  |   | 2,894.5 |  |
| Less:Currentportion                          |  |  |             |   | 11.9    |                 |  |  |  |   | 3.8     |  |
|                                         |  |  |             | $ | 2,806.6 |                 |  |  |  | $ | 2,890.7 |  |
|                                              |

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|          |                          |
|----------|--------------------------|
| 5.  | Unitholder’sEquity |

Unitholder’s equity consists of thefollowing:

|                                      |  |  |             |   |         |                   |  |  |  |   |         |   |
|--------------------------------------|--|--|-------------|---|---------|-------------------|--|--|--|---|---------|---|
| (dollarsin millions)                 |  |  | June30,2006 |   |         | December 31, 2005 |
| Capitalaccount                       |  |  |             | $ | 1,013.6 |                   |  |  |  | $ | 1,013.2 |   |
| Accumulateddeficit                   |  |  |             |   | (19.7   | )                 |  |  |  |   | (60.1   | ) |
| Accumulatedother comprehensiveincome |  |  |             |   | 127.7   |                   |  |  |  |   | 80.1    |   |
| Totalunitholder’sequity        |  |  |             | $ | 1,121.6 |                   |  |  |  | $ | 1,033.2 |   |
|                                      |

Thecapital structure of the Company consists of one class of limitedliability company interests represented by Units, which are identicalwith each other in every respect. At June  30,  2006 andDecember  31,  2005, there were 100 Units issued andoutstanding, which were owned by Nalco Finance HoldingsLLC.

|          |                                               |
|----------|-----------------------------------------------|
| 6.  | Pension and Other Postretirement BenefitPlans |

The components of net periodic pension cost and thecost of other postretirement benefits for the three months and sixmonths ended June  30,  2006 and 2005 were asfollows:

|                              |  |  |                               |   |      |                               |  |  |                              |   |         |                             |  |  |  |   |       |   |  |  |  |   |         |   |
|------------------------------|--|--|-------------------------------|---|------|-------------------------------|--|--|------------------------------|---|---------|-----------------------------|--|--|--|---|-------|---|--|--|--|---|---------|---|
|                         |  |  | PensionBenefits               |
| (dollarsin millions)         |  |  | Three MonthsendedJune 30,2006 |   |      | Three Monthsended June30,2005 |  |  | Six Monthsended June 30,2006 |   |         | Six Monthsended June30,2005 |
| Servicecost                  |  |  |                               | $ | 6.9  |                               |  |  |                              | $ | 6.3     |                             |  |  |  | $ | 14.6  |   |  |  |  | $ | 13.4    |   |
| Interestcost                 |  |  |                               |   | 10.7 |                               |  |  |                              |   | 9.3     |                             |  |  |  |   | 21.1  |   |  |  |  |   | 19.5    |   |
| Expectedreturn on planassets |  |  |                               |   | (7.9 | )                             |  |  |                              |   | (5.7    | )                           |  |  |  |   | (14.7 | ) |  |  |  |   | (12.2   | ) |
| Recognizednet actuarialloss  |  |  |                               |   | 0.1  |                               |  |  |                              |   | — |                             |  |  |  |   | 0.2   |   |  |  |  |   | — |   |
| Settlementcharge             |  |  |                               |   | 0.1  |                               |  |  |                              |   | — |                             |  |  |  |   | 0.4   |   |  |  |  |   | — |   |
| Netperiodiccost              |  |  |                               | $ | 9.9  |                               |  |  |                              | $ | 9.9     |                             |  |  |  | $ | 21.6  |   |  |  |  | $ | 20.7    |   |
|                              |

|                                  |  |  |                                |   |      |                               |  |  |                             |   |         |                             |  |  |  |   |      |   |  |  |  |   |         |   |
|----------------------------------|--|--|--------------------------------|---|------|-------------------------------|--|--|-----------------------------|---|---------|-----------------------------|--|--|--|---|------|---|--|--|--|---|---------|---|
|                             |  |  | OtherPostretirementBenefits    |
| (dollarsin millions)             |  |  | Three MonthsendedJune 30, 2006 |   |      | Three Monthsended June30,2005 |  |  | Six Monthsended June30,2006 |   |         | Six Monthsended June30,2005 |
| Servicecost                      |  |  |                                | $ | 1.2  |                               |  |  |                             | $ | 1.4     |                             |  |  |  | $ | 2.8  |   |  |  |  | $ | 2.7     |   |
| Interestcost                     |  |  |                                |   | 1.7  |                               |  |  |                             |   | 2.2     |                             |  |  |  |   | 4.0  |   |  |  |  |   | 4.3     |   |
| Amortizationof prior servicecost |  |  |                                |   | (1.0 | )                             |  |  |                             |   | (1.1    | )                           |  |  |  |   | (2.0 | ) |  |  |  |   | (2.0    | ) |
| Recognizednet actuarialloss      |  |  |                                |   | (0.1 | )                             |  |  |                             |   | — |                             |  |  |  |   | (0.1 | ) |  |  |  |   | — |   |
| Netperiodiccost                  |  |  |                                | $ | 1.8  |                               |  |  |                             | $ | 2.5     |                             |  |  |  | $ | 4.7  |   |  |  |  | $ | 5.0     |   |
|                                  |

|    |                               |
|----|-------------------------------|
| 7. | BusinessOptimization Expenses |

The Company has undertakenseveral initiatives to redesign and optimize its business and workprocesses. Business process optimization expenses, consisting mostly ofemployee severance and related costs, were $5.6  million and$17.8  million for the six months ended June  30,2006 and June  30,  2005, respectively.

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|          |                                  |
|----------|----------------------------------|
| 8.  | Summary of Other Income(Expense) |

The components of other income (expense), netfor the three months and six months ended June  30,  2006and 2005, include thefollowing:

|                                                 |  |  |                               |   |      |                               |  |  |                             |   |         |                             |  |  |  |   |      |   |  |  |  |   |      |   |
|-------------------------------------------------|--|--|-------------------------------|---|------|-------------------------------|--|--|-----------------------------|---|---------|-----------------------------|--|--|--|---|------|---|--|--|--|---|------|---|
| (dollarsin millions)                            |  |  | Three MonthsendedJune 30,2006 |   |      | Three Monthsended June30,2005 |  |  | Six Monthsended June30,2006 |   |         | Six Monthsended June30,2005 |
| Franchisetaxes                                  |  |  |                               | $ | (0.7 | )                             |  |  |                             | $ | (0.6    | )                           |  |  |  | $ | (1.5 | ) |  |  |  | $ | (1.3 | ) |
| Equityin earnings of unconsolidatedsubsidiaries |  |  |                               |   | 1.9  |                               |  |  |                             |   | — |                             |  |  |  |   | 2.6  |   |  |  |  |   | 0.8  |   |
| Foreigncurrency exchangeadjustments             |  |  |                               |   | (3.3 | )                             |  |  |                             |   | 2.1     |                             |  |  |  |   | (3.0 | ) |  |  |  |   | 1.4  |   |
| Other                                           |  |  |                               |   | 0.2  |                               |  |  |                             |   | (2.1    | )                           |  |  |  |   | 1.3  |   |  |  |  |   | (3.7 | ) |
|                                            |  |  |                               | $ | (1.9 | )                             |  |  |                             | $ | (0.6    | )                           |  |  |  | $ | (0.6 | ) |  |  |  | $ | (2.8 | ) |
|                                                 |

|          |             |
|----------|-------------|
| 9.  | IncomeTaxes |

The Company’s effective income tax rate was39.0% for the six months ended June  30,  2006. Therate varies from the U.S. federal statutory income tax rate of35% due primarily to the incremental tax on dividends receivedfrom non-U.S. subsidiaries, foreign taxes provided at other than the35% U.S. statutory rate, U.S. state income taxes, nondeductibleexpenses, and other permanent differences.

Theseaforementioned items also contributed to the variation between the U.S.federal statutory income tax rate and the Company’s effectiveincome tax rate for the six months ended June  30,2005.

The following is a reconciliation of the taxderived by applying the U.S. statutory tax rate to the earnings (loss)before income taxes and minority interest and comparing that to therecorded income tax provision(benefit):

|                              |  |  |                              |   |      |                               |  |  |                             |   |      |                              |  |  |  |   |      |  |  |  |  |   |      |  |
|------------------------------|--|--|------------------------------|---|------|-------------------------------|--|--|-----------------------------|---|------|------------------------------|--|--|--|---|------|--|--|--|--|---|------|--|
| (dollarsin millions)         |  |  | ThreeMonthsendedJune 30,2006 |   |      | ThreeMonthsended June 30,2005 |  |  | SixMonthsended June 30,2006 |   |      | SixMonthsended June 30, 2005 |
| U.S.statutory taxrate        |  |  |                              | $ | 16.0 |                               |  |  |                             | $ | (0.2 | )                            |  |  |  | $ | 25.2 |  |  |  |  | $ | 10.4 |  |
| Other                        |  |  |                              |   | 1.1  |                               |  |  |                             |   | 0.1  |                              |  |  |  |   | 2.9  |  |  |  |  |   | 2.5  |  |
| Incometax provision(benefit) |  |  |                              | $ | 17.1 |                               |  |  |                             | $ | (0.1 | )                            |  |  |  | $ | 28.1 |  |  |  |  | $ | 12.9 |  |
|                              |

|           |                            |
|-----------|----------------------------|
| 10.  | ComprehensiveIncome (Loss) |

Total comprehensive income (loss) and itscomponents, net of related tax, for the three months and six monthsended June  30,  2006 and 2005, are asfollows:

|                                                       |  |  |                               |   |        |                               |  |  |                             |   |        |                             |  |  |  |   |        |   |  |  |  |   |        |   |
|-------------------------------------------------------|--|--|-------------------------------|---|--------|-------------------------------|--|--|-----------------------------|---|--------|-----------------------------|--|--|--|---|--------|---|--|--|--|---|--------|---|
| (dollarsin millions)                                  |  |  | Three MonthsendedJune 30,2006 |   |        | Three Monthsended June30,2005 |  |  | Six Monthsended June30,2006 |   |        | Six Monthsended June30,2005 |
| Net earnings(loss)                                    |  |  |                               | $ | 26.8   |                               |  |  |                             | $ | (2.1   | )                           |  |  |  | $ | 40.4   |   |  |  |  | $ | 14.0   |   |
| Othercomprehensive income (loss), net of incometaxes: |  |  |                               |   |   |                               |  |  |                             |   |   |                             |  |  |  |   |   |   |  |  |  |   |   |   |
| Derivatives                                           |  |  |                               |   | (0.3   | )                             |  |  |                             |   | 0.2    |                             |  |  |  |   | (0.6   | ) |  |  |  |   | 0.7    |   |
| Foreigncurrency translationadjustments                |  |  |                               |   | 27.7   |                               |  |  |                             |   | (24.9  | )                           |  |  |  |   | 48.2   |   |  |  |  |   | (46.0  | ) |
| Comprehensiveincome(loss)                             |  |  |                               | $ | 54.2   |                               |  |  |                             | $ | (26.8  | )                           |  |  |  | $ | 88.0   |   |  |  |  | $ | (31.3  | ) |
|                                                       |

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|           |                    |
|-----------|--------------------|
| 11.  | SegmentInformation |

The Company provides integrated watertreatment and process improvement services for industrial andinstitutional applications, using technologically advanced solutions,combining chemical products and equipment, and consistent, reliableon-site service 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.

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

Industrial and InstitutionalServices — This segment serves the globalwater treatment and process chemical needs of the industrial,institutional, and municipal markets.

EnergyServices — This segment serves the processchemicals and water treatment needs of the global petroleum andpetrochemical industries in both upstream and downstreamapplications.

PaperServices — This segment serves the processchemicals and water treatment needs of the global pulp and paperindustry.

Other — Thissegment serves the alternative channels to market, supply chainactivities, and certain other operating expenses not allocated to asegment. It also includes the Company’s subsidiary in India andthe Katayama Nalco joint venture.

The Company evaluatesthe performance of its segments based on ‘‘directcontribution’’, which is defined as net sales, less costof products sold (excluding variances to standard costs), selling andservice expenses, marketing expenses, research expenses and‘‘capital charges’’ directly attributableto each segment. Each segment is assessed an internal non-GAAP‘‘capital charge’’ based on trade accountsreceivable, inventories and equipment specifically identifiable to thesegment. The capital charges included in each segment’s directcontribution are eliminated to arrive at the consolidated directcontribution for the Company. There are no intersegment revenues. TheCompany’s segment reporting was changed in the first quarter of2006 to reflect the aforementioned capital charge in the reporteddirect contribution of each segment. Prior year data have beenreclassified between segments to conform to the current yearpresentation.

Net sales by reportable segment were asfollows:

|                                      |  |  |                               |   |       |                               |  |  |                              |   |       |                             |  |  |  |   |         |  |  |  |  |   |         |  |
|--------------------------------------|--|--|-------------------------------|---|-------|-------------------------------|--|--|------------------------------|---|-------|-----------------------------|--|--|--|---|---------|--|--|--|--|---|---------|--|
| (dollarsin millions)                 |  |  | Three MonthsendedJune 30,2006 |   |       | Three Monthsended June30,2005 |  |  | Six Monthsended June 30,2006 |   |       | Six Monthsended June30,2005 |
| Industrial and InstitutionalServices |  |  |                               | $ | 389.4 |                               |  |  |                              | $ | 377.5 |                             |  |  |  | $ | 767.8   |  |  |  |  | $ | 718.5   |  |
| EnergyServices                       |  |  |                               |   | 259.3 |                               |  |  |                              |   | 221.5 |                             |  |  |  |   | 505.6   |  |  |  |  |   | 432.1   |  |
| PaperServices                        |  |  |                               |   | 178.1 |                               |  |  |                              |   | 176.1 |                             |  |  |  |   | 353.9   |  |  |  |  |   | 346.2   |  |
| Other                                |  |  |                               |   | 64.2  |                               |  |  |                              |   | 61.2  |                             |  |  |  |   | 113.1   |  |  |  |  |   | 117.1   |  |
| Netsales                             |  |  |                               | $ | 891.0 |                               |  |  |                              | $ | 836.3 |                             |  |  |  | $ | 1,740.4 |  |  |  |  | $ | 1,613.9 |  |
|                                      |

Thefollowing table presents direct contribution by reportable segment andreconciles the total segment direct contribution to earnings beforeincome taxes and minority interests:

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|           |                                     |
|-----------|-------------------------------------|
| 11.  | SegmentInformation (continued) |

|                                                          |  |  |                               |   |        |                               |  |  |                              |   |        |                             |  |  |  |   |        |   |  |  |  |   |        |   |
|----------------------------------------------------------|--|--|-------------------------------|---|--------|-------------------------------|--|--|------------------------------|---|--------|-----------------------------|--|--|--|---|--------|---|--|--|--|---|--------|---|
| (dollarsin millions)                                     |  |  | Three MonthsendedJune 30,2006 |   |        | Three Monthsended June30,2005 |  |  | Six Monthsended June 30,2006 |   |        | Six Monthsended June30,2005 |
| Segment directcontribution:                              |  |  |                               |   |   |                               |  |  |                              |   |   |                             |  |  |  |   |   |   |  |  |  |   |   |   |
| Industrial andInstitutionalServices                      |  |  |                               | $ | 85.1   |                               |  |  |                              | $ | 82.9   |                             |  |  |  | $ | 164.9  |   |  |  |  | $ | 148.4  |   |
| EnergyServices                                           |  |  |                               |   | 54.9   |                               |  |  |                              |   | 39.7   |                             |  |  |  |   | 103.2  |   |  |  |  |   | 82.7   |   |
| PaperServices                                            |  |  |                               |   | 26.5   |                               |  |  |                              |   | 27.4   |                             |  |  |  |   | 52.6   |   |  |  |  |   | 57.5   |   |
| Other                                                    |  |  |                               |   | (14.9  | )                             |  |  |                              |   | (28.9  | )                           |  |  |  |   | (34.3  | ) |  |  |  |   | (34.1  | ) |
| Capitalchargeelimination                                 |  |  |                               |   | 18.9   |                               |  |  |                              |   | 19.6   |                             |  |  |  |   | 38.1   |   |  |  |  |   | 39.4   |   |
| Totalsegment directcontribution                          |  |  |                               |   | 170.5  |                               |  |  |                              |   | 140.7  |                             |  |  |  |   | 324.5  |   |  |  |  |   | 293.9  |   |
| Expensesnot allocated tosegments:                        |  |  |                               |   |   |                               |  |  |                              |   |   |                             |  |  |  |   |   |   |  |  |  |   |   |   |
| Administrativeexpenses                                   |  |  |                               |   | 45.8   |                               |  |  |                              |   | 47.6   |                             |  |  |  |   | 96.9   |   |  |  |  |   | 94.1   |   |
| Amortizationof intangibleassets                          |  |  |                               |   | 17.5   |                               |  |  |                              |   | 20.5   |                             |  |  |  |   | 34.8   |   |  |  |  |   | 41.1   |   |
| Businessoptimizationexpenses                             |  |  |                               |   | 1.8    |                               |  |  |                              |   | 17.0   |                             |  |  |  |   | 5.6    |   |  |  |  |   | 17.8   |   |
| Operatingearnings(loss)                                  |  |  |                               |   | 105.4  |                               |  |  |                              |   | 55.6   |                             |  |  |  |   | 187.2  |   |  |  |  |   | 140.9  |   |
| Otherincome (expense),net                                |  |  |                               |   | (1.9   | )                             |  |  |                              |   | (0.6   | )                           |  |  |  |   | (0.6   | ) |  |  |  |   | (2.8   | ) |
| Interestincome                                           |  |  |                               |   | 2.3    |                               |  |  |                              |   | 2.0    |                             |  |  |  |   | 4.0    |   |  |  |  |   | 4.1    |   |
| Interestexpense                                          |  |  |                               |   | (60.1  | )                             |  |  |                              |   | (57.6  | )                           |  |  |  |   | (118.6 | ) |  |  |  |   | (112.5 | ) |
| Earnings(loss) before income taxes and minorityinterests |  |  |                               | $ | 45.7   |                               |  |  |                              | $ | (0.6   | )                           |  |  |  | $ | 72.0   |   |  |  |  | $ | 29.7   |   |
|                                                          |

Administrativeexpenses primarily represent the cost of support functions, includinginformation technology, finance, human resources and legal, as well asexpenses for support facilities, executive management and managementincentiveplans.

|           |                             |
|-----------|-----------------------------|
| 12.  | Contingenciesand Litigation |

Various claims, lawsuits andadministrative proceedings are pending or threatened against theCompany and its subsidiaries, arising from the ordinary course ofbusiness with respect to commercial, contract, intellectual property,product liability, employee, environmental and other matters.Historically, these matters have not had a material impact on theconsolidated financial position of the Company. However, the Companycannot predict the outcome of any litigation or the potential forfuture litigation.

The Company has been named as apotentially responsible party (PRP) by the Environmental ProtectionAgency or state enforcement agencies at three pending waste sites wheresome financial contribution is or may be required. These agencies havealso identified many other parties who may be responsible for clean upcosts at these waste disposal sites. The Company is also remediating asmall ground contamination it discovered at its plant in Colombia. TheCompany’s financial contribution to remediate these sites is notexpected to be material. There has been no significant financial impacton the Company up to the present, nor is it anticipated that there willbe in the future, as a result of these matters. The Company has madeand will continue to make provisions for these costs if theCompany’s liability becomes probable and when costs can bereasonably estimated.

The Company’s undiscountedreserves for known environmental clean up costs were $2.1million at June  30,  2006. These environmental reservesrepresent management’s current estimate of its proportionalclean-up costs (and the cost to remediate the Colombia site) and arebased upon negotiation and agreement with enforcement agencies, itsprevious experience with respect to clean-up activities, a detailedreview by the Company of known conditions, and information about otherPRPs. They are not reduced by any possible recoveries from insurancecompanies or other PRPs not specifically identified. Althoughmanagement cannot determine whether or not a material effect on futureoperations is reasonably likely to occur, given the evolving nature ofenvironmental regulations, 

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|           |                                              |
|-----------|----------------------------------------------|
| 12.  | Contingenciesand Litigation (continued) |

it believes that the recorded reserve levelsare appropriate estimates of the potential liability. Althoughsettlement will require future cash outlays, it is not expected thatsuch outlays will materially impact the Company’s liquidityposition. Expenditures for the six months ended June  30,2006, relating to environmental compliance and clean up activities,were not significant.

The Company has been named as adefendant in lawsuits based on claimed involvement in the supply ofallegedly defective or hazardous materials and the claimed presence ofhazardous substances at its plants. 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 thefuture.

On November  2,  2005, the U.K. Healthand Safety Executive (‘‘HSE’’) sent noticethat it intends to initiate legal proceedings against theCompany’s U.K. subsidiary under the Health and Safety at WorkAct. The place of these proceedings is not indicated in the notice.This notice references a legionella outbreak from November  2003that is claimed to have originated at cooling towers owned by one ofthe subsidiary’s customers. The HSE indicates that theproceedings will relate to the cleaning of these cooling towers. TheCompany has not received any specific charges or claims for relief, butwill, in any event, defend and refute any contention that it hasviolated any law.

Beginning on May  16,  2003,the Company has received subpoenas from the U.S. Department of Justicefor 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, theCompany is also a party to a number of lawsuits and is subject tovarious claims 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 bereasonablyestimated.

|           |            |
|-----------|------------|
| 13.  | Guarantees |

Nosignificant guarantees were outstanding at June  30,  2006,other than subsidiary-related performance guarantees.

TheCompany had $26.7  million of letters of credit outstanding atJune  30,  2006.

|           |                                 |
|-----------|---------------------------------|
| 14.  | Recent AccountingPronouncements |

In June  2006, the FinancialAccounting Standards Board (FASB) issued Interpretation No. 48 (FIN48), Accounting for Uncertainty in Income Taxes, aninterpretation of FASB Statement No. 109, Accounting for IncomeTaxes. The interpretation clarifies the accounting for uncertaintyin income taxes recognized in an enterprise’s financialstatements by prescribing a recognition threshold and measurementattribute for the financial statement recognition and measurement of atax position taken or expected to be taken in a tax return. FIN 48 alsoprovides guidance on derecognition, classification, interest andpenalties, accounting in interim periods, disclosure, and transition.The effective date of FIN 48 is no later than fiscal years beginningafter December  15,  2006. The Company is in the process ofdetermining the effects, if any, that adoption of FIN 48 will have onthe Company’s financial position, cash flows and results ofoperations.

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|           |                                                      |
|-----------|------------------------------------------------------|
| 15.  | Supplemental GuarantorCondensed 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. The Senior Notes are fully, unconditionally andjointly and severally guaranteed on an unsecured senior basis and theSenior Subordinated Notes are fully, unconditionally and jointly andseverally guaranteed on an unsecured senior subordinated basis, in eachcase, by Nalco Holdings LLC and by substantially all existing andfuture wholly-owned restricted domestic subsidiaries of Nalco Company(collectively, the ‘‘Guarantors’’). Allother subsidiaries of Nalco Holdings LLC, whether direct or indirect,do not guarantee the Senior Notes and Senior Subordinated Notes(‘‘Non-Guarantors’’). The Guarantors alsounconditionally guarantee the Company’s borrowings under theSenior Secured Credit Facilities on a senior securedbasis.

The following unaudited condensed consolidatingfinancial statements present the results of operations, financialposition and cash flows of (1) the Parent, (2) the Issuer, (3) theGuarantors, (4) the Non-Guarantors and (5) eliminations to arrive atthe information for Nalco Holdings LLC on a consolidated basis.Separate financial statements and other disclosures concerning theGuarantors are not presented because management does not believe thatsuch information is material toinvestors.

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Nalco HoldingsLLC and SubsidiariesCondensed Consolidating Balance SheetJune  30,  2006(dollars inmillions)

|                                                                    |  |  |        |   |         |        |  |  |                       |   |         |                           |  |  |              |   |         |              |  |  |  |   |         |  |  |  |  |   |          |   |  |  |  |   |         |  |
|--------------------------------------------------------------------|--|--|--------|---|---------|--------|--|--|-----------------------|---|---------|---------------------------|--|--|--------------|---|---------|--------------|--|--|--|---|---------|--|--|--|--|---|----------|---|--|--|--|---|---------|--|
|                                                               |  |  | Parent |   |         | Issuer |  |  | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |  | Eliminations |   |         | Consolidated |
| Cash& cashequivalents                                          |  |  |        | $ | — |        |  |  |                       | $ | 0.3     |                           |  |  |              | $ | 1.2     |              |  |  |  | $ | 30.1    |  |  |  |  | $ | —  |   |  |  |  | $ | 31.6    |  |
| Tradeaccountsreceivable                                            |  |  |        |   | — |        |  |  |                       |   | (14.7   | )                         |  |  |              |   | 3.9     |              |  |  |  |   | 650.6   |  |  |  |  |   | —  |   |  |  |  |   | 639.8   |  |
| Inventories– finishedproducts                                |  |  |        |   | — |        |  |  |                       |   | 113.5   |                           |  |  |              |   | 0.5     |              |  |  |  |   | 154.0   |  |  |  |  |   | —  |   |  |  |  |   | 268.0   |  |
| Inventories– materials & work inprocess                  |  |  |        |   | — |        |  |  |                       |   | 28.1    |                           |  |  |              |   | — |              |  |  |  |   | 47.4    |  |  |  |  |   | —  |   |  |  |  |   | 75.5    |  |
| Receivablesfrom relatedparties                                     |  |  |        |   | — |        |  |  |                       |   | 87.3    |                           |  |  |              |   | 13.0    |              |  |  |  |   | 17.9    |  |  |  |  |   | (118.2   | ) |  |  |  |   | — |  |
| Prepaidexpenses, taxes, and other currentassets                    |  |  |        |   | — |        |  |  |                       |   | 13.7    |                           |  |  |              |   | 3.3     |              |  |  |  |   | 48.2    |  |  |  |  |   | —  |   |  |  |  |   | 65.2    |  |
| TotalCurrentAssets                                                 |  |  |        |   | — |        |  |  |                       |   | 228.2   |                           |  |  |              |   | 21.9    |              |  |  |  |   | 948.2   |  |  |  |  |   | (118.2   | ) |  |  |  |   | 1,080.1 |  |
| Property,plant, and equipment,net                                  |  |  |        |   | — |        |  |  |                       |   | 303.1   |                           |  |  |              |   | 43.7    |              |  |  |  |   | 399.8   |  |  |  |  |   | 0.1      |   |  |  |  |   | 746.7   |  |
| Investmentinsubsidiaries                                           |  |  |        |   | 1,135.6 |        |  |  |                       |   | 2,084.6 |                           |  |  |              |   | 367.9   |              |  |  |  |   | — |  |  |  |  |   | (3,588.1 | ) |  |  |  |   | — |  |
| Goodwill                                                           |  |  |        |   | — |        |  |  |                       |   | 951.2   |                           |  |  |              |   | 11.0    |              |  |  |  |   | 1,295.6 |  |  |  |  |   | —  |   |  |  |  |   | 2,257.8 |  |
| Intangibles                                                        |  |  |        |   | — |        |  |  |                       |   | 1,039.5 |                           |  |  |              |   | 3.7     |              |  |  |  |   | 157.6   |  |  |  |  |   | —  |   |  |  |  |   | 1,200.8 |  |
| Receivablesfrom relatedparties                                     |  |  |        |   | — |        |  |  |                       |   | — |                           |  |  |              |   | 324.2   |              |  |  |  |   | 263.6   |  |  |  |  |   | (587.8   | ) |  |  |  |   | — |  |
| Otherassets                                                        |  |  |        |   | — |        |  |  |                       |   | 260.4   |                           |  |  |              |   | 17.2    |              |  |  |  |   | 45.5    |  |  |  |  |   | —  |   |  |  |  |   | 323.1   |  |
| TotalAssets                                                        |  |  |        | $ | 1,135.6 |        |  |  |                       | $ | 4,867.0 |                           |  |  |              | $ | 789.6   |              |  |  |  | $ | 3,110.3 |  |  |  |  | $ | (4,294.0 | ) |  |  |  | $ | 5,608.5 |  |
| Accountspayable                                                    |  |  |        | $ | — |        |  |  |                       |   | 126.5   |                           |  |  |              |   | 1.2     |              |  |  |  |   | 144.6   |  |  |  |  | $ | —  |   |  |  |  |   | 272.3   |  |
| Short-termdebt                                                     |  |  |        |   | — |        |  |  |                       |   | 36.4    |                           |  |  |              |   | — |              |  |  |  |   | 98.7    |  |  |  |  |   | —  |   |  |  |  |   | 135.1   |  |
| Othercurrentliabilities                                            |  |  |        |   | — |        |  |  |                       |   | 63.5    |                           |  |  |              |   | 8.4     |              |  |  |  |   | 147.6   |  |  |  |  |   | —  |   |  |  |  |   | 219.5   |  |
| Intercompanyaccountspayable                                        |  |  |        |   | — |        |  |  |                       |   | (0.3    | )                         |  |  |              |   | 26.3    |              |  |  |  |   | 92.2    |  |  |  |  |   | (118.2   | ) |  |  |  |   | — |  |
| TotalCurrentLiabilities                                            |  |  |        |   | — |        |  |  |                       |   | 226.1   |                           |  |  |              |   | 35.9    |              |  |  |  |   | 483.1   |  |  |  |  |   | (118.2   | ) |  |  |  |   | 626.9   |  |
| Long-termdebt                                                      |  |  |        |   | — |        |  |  |                       |   | 2,806.3 |                           |  |  |              |   | — |              |  |  |  |   | 0.3     |  |  |  |  |   | —  |   |  |  |  |   | 2,806.6 |  |
| Deferredincometaxes                                                |  |  |        |   | — |        |  |  |                       |   | 227.5   |                           |  |  |              |   | 50.1    |              |  |  |  |   | 93.3    |  |  |  |  |   | —  |   |  |  |  |   | 370.9   |  |
| Accruedpensionbenefits                                             |  |  |        |   | — |        |  |  |                       |   | 223.4   |                           |  |  |              |   | — |              |  |  |  |   | 161.7   |  |  |  |  |   | —  |   |  |  |  |   | 385.1   |  |
| Intercompanynotes payable-longterm                                 |  |  |        |   | — |        |  |  |                       |   | 587.8   |                           |  |  |              |   | — |              |  |  |  |   | — |  |  |  |  |   | (587.8   | ) |  |  |  |   | — |  |
| Otherliabilities                                                   |  |  |        |   | — |        |  |  |                       |   | 262.9   |                           |  |  |              |   | — |              |  |  |  |   | 20.5    |  |  |  |  |   | —  |   |  |  |  |   | 283.4   |  |
| TotalOtherLiabilities                                              |  |  |        |   | — |        |  |  |                       |   | 4,107.9 |                           |  |  |              |   | 50.1    |              |  |  |  |   | 275.8   |  |  |  |  |   | (587.8   | ) |  |  |  |   | 3,846.0 |  |
| MinorityInterest                                                   |  |  |        |   | 14.0    |        |  |  |                       |   | — |                           |  |  |              |   | — |              |  |  |  |   | 14.0    |  |  |  |  |   | (14.0    | ) |  |  |  |   | 14.0    |  |
| TotalUnitholder’s/ Shareholders’Equity                 |  |  |        |   | 1,121.6 |        |  |  |                       |   | 533.0   |                           |  |  |              |   | 703.6   |              |  |  |  |   | 2,337.4 |  |  |  |  |   | (3,574.0 | ) |  |  |  |   | 1,121.6 |  |
| TotalLiabilities and Unitholder’s/ Shareholders’Equity |  |  |        | $ | 1,135.6 |        |  |  |                       | $ | 4,867.0 |                           |  |  |              | $ | 789.6   |              |  |  |  | $ | 3,110.3 |  |  |  |  | $ | (4,294.0 | ) |  |  |  | $ | 5,608.5 |  |
|                                                                    |

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Nalco Holdings LLC andSubsidiariesCondensed Consolidating Balance SheetDecember  31,  2005(dollars inmillions)

|                                                                    |  |  |        |   |         |        |  |  |                       |   |         |                           |  |  |              |   |         |              |  |  |  |   |         |  |  |  |  |   |          |   |  |  |  |   |         |  |
|--------------------------------------------------------------------|--|--|--------|---|---------|--------|--|--|-----------------------|---|---------|---------------------------|--|--|--------------|---|---------|--------------|--|--|--|---|---------|--|--|--|--|---|----------|---|--|--|--|---|---------|--|
|                                                               |  |  | Parent |   |         | Issuer |  |  | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |  | Eliminations |   |         | Consolidated |
| Cash& cashequivalents                                          |  |  |        | $ | — |        |  |  |                       | $ | — |                           |  |  |              | $ | 1.7     |              |  |  |  | $ | 29.1    |  |  |  |  | $ | —  |   |  |  |  | $ | 30.8    |  |
| Tradeaccountsreceivable                                            |  |  |        |   | — |        |  |  |                       |   | (13.6   | )                         |  |  |              |   | 6.5     |              |  |  |  |   | 629.4   |  |  |  |  |   | —  |   |  |  |  |   | 622.3   |  |
| Inventories– finishedproducts                                |  |  |        |   | — |        |  |  |                       |   | 64.6    |                           |  |  |              |   | 45.1    |              |  |  |  |   | 132.9   |  |  |  |  |   | —  |   |  |  |  |   | 242.6   |  |
| Inventories– materials & work inprocess                  |  |  |        |   | — |        |  |  |                       |   | 15.0    |                           |  |  |              |   | 11.5    |              |  |  |  |   | 44.1    |  |  |  |  |   | —  |   |  |  |  |   | 70.6    |  |
| Receivablesfrom relatedparties                                     |  |  |        |   | — |        |  |  |                       |   | 24.8    |                           |  |  |              |   | 225.4   |              |  |  |  |   | 41.1    |  |  |  |  |   | (291.3   | ) |  |  |  |   | — |  |
| Prepaidexpenses, taxes, and other currentassets                    |  |  |        |   | — |        |  |  |                       |   | 24.1    |                           |  |  |              |   | 13.8    |              |  |  |  |   | 45.2    |  |  |  |  |   | —  |   |  |  |  |   | 83.1    |  |
| TotalCurrentAssets                                                 |  |  |        |   | — |        |  |  |                       |   | 114.9   |                           |  |  |              |   | 304.0   |              |  |  |  |   | 921.8   |  |  |  |  |   | (291.3   | ) |  |  |  |   | 1,049.4 |  |
| Property,plant, and equipment,net                                  |  |  |        |   | — |        |  |  |                       |   | 218.1   |                           |  |  |              |   | 142.9   |              |  |  |  |   | 394.3   |  |  |  |  |   | —  |   |  |  |  |   | 755.3   |  |
| Investmentinsubsidiaries                                           |  |  |        |   | 1,044.4 |        |  |  |                       |   | 2,499.0 |                           |  |  |              |   | 367.9   |              |  |  |  |   | — |  |  |  |  |   | (3,911.3 | ) |  |  |  |   | — |  |
| Goodwill                                                           |  |  |        |   | — |        |  |  |                       |   | 654.9   |                           |  |  |              |   | 308.6   |              |  |  |  |   | 1,233.2 |  |  |  |  |   | —  |   |  |  |  |   | 2,196.7 |  |
| Intangibles                                                        |  |  |        |   | — |        |  |  |                       |   | 1,014.4 |                           |  |  |              |   | 47.9    |              |  |  |  |   | 165.2   |  |  |  |  |   | —  |   |  |  |  |   | 1,227.5 |  |
| Receivablesfrom relatedparties                                     |  |  |        |   | — |        |  |  |                       |   | — |                           |  |  |              |   | 309.4   |              |  |  |  |   | 173.3   |  |  |  |  |   | (482.7   | ) |  |  |  |   | — |  |
| Otherassets                                                        |  |  |        |   | — |        |  |  |                       |   | 268.4   |                           |  |  |              |   | 18.3    |              |  |  |  |   | 38.6    |  |  |  |  |   | —  |   |  |  |  |   | 325.3   |  |
| TotalAssets                                                        |  |  |        | $ | 1,044.4 |        |  |  |                       | $ | 4,769.7 |                           |  |  |              | $ | 1,499.0 |              |  |  |  | $ | 2,926.4 |  |  |  |  | $ | (4,685.3 | ) |  |  |  | $ | 5,554.2 |  |
| Accountspayable                                                    |  |  |        | $ | — |        |  |  |                       | $ | 87.0    |                           |  |  |              | $ | 44.9    |              |  |  |  | $ | 153.5   |  |  |  |  |   | —  |   |  |  |  | $ | 285.4   |  |
| Short-termdebt                                                     |  |  |        |   | — |        |  |  |                       |   | 6.2     |                           |  |  |              |   | 1.0     |              |  |  |  |   | 15.4    |  |  |  |  |   | —  |   |  |  |  |   | 22.6    |  |
| Othercurrentliabilities                                            |  |  |        |   | — |        |  |  |                       |   | 57.4    |                           |  |  |              |   | 35.2    |              |  |  |  |   | 143.8   |  |  |  |  |   | (1.3     | ) |  |  |  |   | 235.1   |  |
| Intercompanyaccountspayable                                        |  |  |        |   | — |        |  |  |                       |   | 155.9   |                           |  |  |              |   | 38.2    |              |  |  |  |   | 95.9    |  |  |  |  |   | (290.0   | ) |  |  |  |   | — |  |
| TotalCurrentLiabilities                                            |  |  |        |   | — |        |  |  |                       |   | 306.5   |                           |  |  |              |   | 119.3   |              |  |  |  |   | 408.6   |  |  |  |  |   | (291.3   | ) |  |  |  |   | 543.1   |  |
| Long-termdebt                                                      |  |  |        |   | — |        |  |  |                       |   | 2,814.7 |                           |  |  |              |   | — |              |  |  |  |   | 76.0    |  |  |  |  |   | —  |   |  |  |  |   | 2,890.7 |  |
| Deferredincometaxes                                                |  |  |        |   | — |        |  |  |                       |   | 303.5   |                           |  |  |              |   | 1.0     |              |  |  |  |   | 76.2    |  |  |  |  |   | —  |   |  |  |  |   | 380.7   |  |
| Accruedpensionbenefits                                             |  |  |        |   | — |        |  |  |                       |   | 227.9   |                           |  |  |              |   | 42.4    |              |  |  |  |   | 146.1   |  |  |  |  |   | —  |   |  |  |  |   | 416.4   |  |
| Intercompanynotes payable-longterm                                 |  |  |        |   | — |        |  |  |                       |   | 482.7   |                           |  |  |              |   | — |              |  |  |  |   | — |  |  |  |  |   | (482.7   | ) |  |  |  |   | — |  |
| Otherliabilities                                                   |  |  |        |   | — |        |  |  |                       |   | 231.8   |                           |  |  |              |   | 26.7    |              |  |  |  |   | 20.4    |  |  |  |  |   | —  |   |  |  |  |   | 278.9   |  |
| TotalOtherLiabilities                                              |  |  |        |   | — |        |  |  |                       |   | 4,060.6 |                           |  |  |              |   | 70.1    |              |  |  |  |   | 318.7   |  |  |  |  |   | (482.7   | ) |  |  |  |   | 3,966.7 |  |
| MinorityInterest                                                   |  |  |        |   | 11.2    |        |  |  |                       |   | — |                           |  |  |              |   | — |              |  |  |  |   | 11.2    |  |  |  |  |   | (11.2    | ) |  |  |  |   | 11.2    |  |
| Unitholder’s/Shareholders’Equity                       |  |  |        |   | 1,033.2 |        |  |  |                       |   | 402.6   |                           |  |  |              |   | 1,309.6 |              |  |  |  |   | 2,187.9 |  |  |  |  |   | (3,900.1 | ) |  |  |  |   | 1,033.2 |  |
| TotalLiabilities and Unitholder’s/ Shareholders’Equity |  |  |        | $ | 1,044.4 |        |  |  |                       | $ | 4,769.7 |                           |  |  |              | $ | 1,499.0 |              |  |  |  | $ | 2,926.4 |  |  |  |  | $ | (4,685.3 | ) |  |  |  | $ | 5,554.2 |  |
|                                                                    |

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Nalco Holdings LLC andSubsidiariesCondensed Consolidating Statement ofOperationsThree months ended June  30,2006(dollars inmillions)

|                                                          |  |  |        |   |         |        |  |  |                       |   |         |                           |  |  |              |   |         |              |  |  |  |   |        |   |  |  |  |   |         |   |  |  |  |   |        |   |
|----------------------------------------------------------|--|--|--------|---|---------|--------|--|--|-----------------------|---|---------|---------------------------|--|--|--------------|---|---------|--------------|--|--|--|---|--------|---|--|--|--|---|---------|---|--|--|--|---|--------|---|
|                                                     |  |  | Parent |   |         | Issuer |  |  | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |  | Eliminations |   |         | Consolidated |
| Netsales                                                 |  |  |        | $ | — |        |  |  |                       | $ | 452.0   |                           |  |  |              | $ | 6.4     |              |  |  |  | $ | 482.9  |   |  |  |  | $ | (50.3   | ) |  |  |  | $ | 891.0  |   |
| Operatingcosts andexpenses:                              |  |  |        |   |    |        |  |  |                       |   |    |                           |  |  |              |   |    |              |  |  |  |   |   |   |  |  |  |   |    |   |  |  |  |   |   |   |
| Costof productsold                                       |  |  |        |   | — |        |  |  |                       |   | 278.6   |                           |  |  |              |   | 6.2     |              |  |  |  |   | 261.1  |   |  |  |  |   | (50.3   | ) |  |  |  |   | 495.6  |   |
| Selling,administrative, and researchexpenses             |  |  |        |   | — |        |  |  |                       |   | 129.1   |                           |  |  |              |   | 1.1     |              |  |  |  |   | 140.5  |   |  |  |  |   | — |   |  |  |  |   | 270.7  |   |
| Amortizationof intangibleassets                          |  |  |        |   | — |        |  |  |                       |   | 9.5     |                           |  |  |              |   | 0.1     |              |  |  |  |   | 7.9    |   |  |  |  |   | — |   |  |  |  |   | 17.5   |   |
| Businessoptimizationexpenses                             |  |  |        |   | — |        |  |  |                       |   | 0.3     |                           |  |  |              |   | — |              |  |  |  |   | 1.5    |   |  |  |  |   | — |   |  |  |  |   | 1.8    |   |
| Totaloperating costs andexpenses                         |  |  |        |   | — |        |  |  |                       |   | 417.5   |                           |  |  |              |   | 7.4     |              |  |  |  |   | 411.0  |   |  |  |  |   | (50.3   | ) |  |  |  |   | 785.6  |   |
| Operatingearnings(loss)                                  |  |  |        |   | — |        |  |  |                       |   | 34.5    |                           |  |  |              |   | (1.0    | )            |  |  |  |   | 71.9   |   |  |  |  |   | — |   |  |  |  |   | 105.4  |   |
| Otherincome (expense),net                                |  |  |        |   | 28.6    |        |  |  |                       |   | 21.8    |                           |  |  |              |   | 8.4     |              |  |  |  |   | (26.9  | ) |  |  |  |   | (33.8   | ) |  |  |  |   | (1.9   | ) |
| Interestincome                                           |  |  |        |   | — |        |  |  |                       |   | 1.6     |                           |  |  |              |   | 3.8     |              |  |  |  |   | 15.3   |   |  |  |  |   | (18.4   | ) |  |  |  |   | 2.3    |   |
| Interestexpense                                          |  |  |        |   | — |        |  |  |                       |   | (76.2   | )                         |  |  |              |   | — |              |  |  |  |   | (2.3   | ) |  |  |  |   | 18.4    |   |  |  |  |   | (60.1  | ) |
| Earnings(loss) before income taxes and minorityinterests |  |  |        |   | 28.6    |        |  |  |                       |   | (18.3   | )                         |  |  |              |   | 11.2    |              |  |  |  |   | 58.0   |   |  |  |  |   | (33.8   | ) |  |  |  |   | 45.7   |   |
| Incometax provision(benefit)                             |  |  |        |   | — |        |  |  |                       |   | (7.7    | )                         |  |  |              |   | 4.4     |              |  |  |  |   | 20.4   |   |  |  |  |   | — |   |  |  |  |   | 17.1   |   |
| Minorityinterests                                        |  |  |        |   | (1.8    | )      |  |  |                       |   | — |                           |  |  |              |   | — |              |  |  |  |   | (1.8   | ) |  |  |  |   | 1.8     |   |  |  |  |   | (1.8   | ) |
| Netearnings(loss)                                        |  |  |        | $ | 26.8    |        |  |  |                       | $ | (10.6   | )                         |  |  |              | $ | 6.8     |              |  |  |  | $ | 35.8   |   |  |  |  | $ | (32.0   | ) |  |  |  | $ | 26.8   |   |
|                                                          |

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Nalco Holdings LLC andSubsidiariesCondensed Consolidating Statement ofOperationsThree months ended June  30,  2005(dollars inmillions)

|                                                          |  |  |        |   |         |        |  |  |                       |   |         |                           |  |  |              |   |         |              |  |  |  |   |        |   |  |  |  |   |         |   |  |  |  |   |        |   |
|----------------------------------------------------------|--|--|--------|---|---------|--------|--|--|-----------------------|---|---------|---------------------------|--|--|--------------|---|---------|--------------|--|--|--|---|--------|---|--|--|--|---|---------|---|--|--|--|---|--------|---|
|                                                     |  |  | Parent |   |         | Issuer |  |  | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |  | Eliminations |   |         | Consolidated |
| Netsales                                                 |  |  |        | $ | — |        |  |  |                       | $ | 287.3   |                           |  |  |              | $ | 159.7   |              |  |  |  | $ | 470.2  |   |  |  |  | $ | (80.9   | ) |  |  |  | $ | 836.3  |   |
| Operatingcosts andexpenses:                              |  |  |        |   |    |        |  |  |                       |   |    |                           |  |  |              |   |    |              |  |  |  |   |   |   |  |  |  |   |    |   |  |  |  |   |   |   |
| Costof productsold                                       |  |  |        |   | — |        |  |  |                       |   | 196.1   |                           |  |  |              |   | 108.9   |              |  |  |  |   | 256.2  |   |  |  |  |   | (80.9   | ) |  |  |  |   | 480.3  |   |
| Selling,administrative, and researchexpenses             |  |  |        |   | — |        |  |  |                       |   | 98.6    |                           |  |  |              |   | 29.9    |              |  |  |  |   | 134.4  |   |  |  |  |   | — |   |  |  |  |   | 262.9  |   |
| Amortizationof intangibleassets                          |  |  |        |   | — |        |  |  |                       |   | 8.3     |                           |  |  |              |   | 2.6     |              |  |  |  |   | 9.6    |   |  |  |  |   | — |   |  |  |  |   | 20.5   |   |
| Businessoptimizationexpenses                             |  |  |        |   | — |        |  |  |                       |   | 2.6     |                           |  |  |              |   | 0.5     |              |  |  |  |   | 13.9   |   |  |  |  |   | — |   |  |  |  |   | 17.0   |   |
| Totaloperating costs andexpenses                         |  |  |        |   | — |        |  |  |                       |   | 305.6   |                           |  |  |              |   | 141.9   |              |  |  |  |   | 414.1  |   |  |  |  |   | (80.9   | ) |  |  |  |   | 780.7  |   |
| Operatingearnings(loss)                                  |  |  |        |   | — |        |  |  |                       |   | (18.3   | )                         |  |  |              |   | 17.8    |              |  |  |  |   | 56.1   |   |  |  |  |   | — |   |  |  |  |   | 55.6   |   |
| Otherincome (expense),net                                |  |  |        |   | (0.5    | )      |  |  |                       |   | 15.8    |                           |  |  |              |   | 6.1     |              |  |  |  |   | (21.0  | ) |  |  |  |   | (1.0    | ) |  |  |  |   | (0.6   | ) |
| Interestincome                                           |  |  |        |   | — |        |  |  |                       |   | 1.6     |                           |  |  |              |   | 2.7     |              |  |  |  |   | 10.2   |   |  |  |  |   | (12.5   | ) |  |  |  |   | 2.0    |   |
| Interestexpense                                          |  |  |        |   | — |        |  |  |                       |   | (64.3   | )                         |  |  |              |   | (3.4    | )            |  |  |  |   | (2.4   | ) |  |  |  |   | 12.5    |   |  |  |  |   | (57.6  | ) |
| Earnings(loss) before income taxes and minorityinterests |  |  |        |   | (0.5    | )      |  |  |                       |   | (65.2   | )                         |  |  |              |   | 23.2    |              |  |  |  |   | 42.9   |   |  |  |  |   | (1.0    | ) |  |  |  |   | (0.6   | ) |
| Incometax provision(benefit)                             |  |  |        |   | — |        |  |  |                       |   | (17.9   | )                         |  |  |              |   | 2.2     |              |  |  |  |   | 15.6   |   |  |  |  |   | — |   |  |  |  |   | (0.1   | ) |
| Minorityinterests                                        |  |  |        |   | (1.6    | )      |  |  |                       |   | — |                           |  |  |              |   | — |              |  |  |  |   | (1.6   | ) |  |  |  |   | 1.6     |   |  |  |  |   | (1.6   | ) |
| Netearnings(loss)                                        |  |  |        | $ | (2.1    | )      |  |  |                       | $ | (47.3   | )                         |  |  |              | $ | 21.0    |              |  |  |  | $ | 25.7   |   |  |  |  | $ | 0.6     |   |  |  |  | $ | (2.1   | ) |
|                                                          |

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Nalco Holdings LLC andSubsidiariesCondensed Consolidating Statement ofOperationsSix Months ended June  30,2006(dollars inmillions)

|                                                          |  |  |        |   |         |        |  |  |                       |   |         |                           |  |  |              |   |         |              |  |  |  |   |        |   |  |  |  |   |         |   |  |  |  |   |         |   |
|----------------------------------------------------------|--|--|--------|---|---------|--------|--|--|-----------------------|---|---------|---------------------------|--|--|--------------|---|---------|--------------|--|--|--|---|--------|---|--|--|--|---|---------|---|--|--|--|---|---------|---|
|                                                     |  |  | Parent |   |         | Issuer |  |  | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |  | Eliminations |   |         | Consolidated |
| Netsales                                                 |  |  |        | $ | — |        |  |  |                       | $ | 888.2   |                           |  |  |              | $ | 12.0    |              |  |  |  | $ | 944.6  |   |  |  |  | $ | (104.4  | ) |  |  |  | $ | 1,740.4 |   |
| Operatingcosts andexpenses:                              |  |  |        |   |    |        |  |  |                       |   |    |                           |  |  |              |   |    |              |  |  |  |   |   |   |  |  |  |   |    |   |  |  |  |   |    |   |
| Costof productsold                                       |  |  |        |   | — |        |  |  |                       |   | 549.2   |                           |  |  |              |   | 9.8     |              |  |  |  |   | 512.1  |   |  |  |  |   | (104.4  | ) |  |  |  |   | 966.7   |   |
| Selling,administrative, and researchexpenses             |  |  |        |   | — |        |  |  |                       |   | 268.4   |                           |  |  |              |   | 3.0     |              |  |  |  |   | 274.7  |   |  |  |  |   | — |   |  |  |  |   | 546.1   |   |
| Amortizationof intangibleassets                          |  |  |        |   | — |        |  |  |                       |   | 19.0    |                           |  |  |              |   | 0.1     |              |  |  |  |   | 15.7   |   |  |  |  |   | — |   |  |  |  |   | 34.8    |   |
| Businessoptimizationexpenses                             |  |  |        |   | — |        |  |  |                       |   | 0.6     |                           |  |  |              |   | — |              |  |  |  |   | 5.0    |   |  |  |  |   | — |   |  |  |  |   | 5.6     |   |
| Totaloperating costs andexpenses                         |  |  |        |   | — |        |  |  |                       |   | 837.2   |                           |  |  |              |   | 12.9    |              |  |  |  |   | 807.5  |   |  |  |  |   | (104.4  | ) |  |  |  |   | 1,553.2 |   |
| Operatingearnings(loss)                                  |  |  |        |   | — |        |  |  |                       |   | 51.0    |                           |  |  |              |   | (0.9    | )            |  |  |  |   | 137.1  |   |  |  |  |   | — |   |  |  |  |   | 187.2   |   |
| Otherincome (expense),net                                |  |  |        |   | 43.9    |        |  |  |                       |   | 34.6    |                           |  |  |              |   | 14.8    |              |  |  |  |   | (44.1  | ) |  |  |  |   | (49.8   | ) |  |  |  |   | (0.6    | ) |
| Interestincome                                           |  |  |        |   | — |        |  |  |                       |   | 3.0     |                           |  |  |              |   | 7.2     |              |  |  |  |   | 29.0   |   |  |  |  |   | (35.2   | ) |  |  |  |   | 4.0     |   |
| Interestexpense                                          |  |  |        |   | — |        |  |  |                       |   | (149.2  | )                         |  |  |              |   | — |              |  |  |  |   | (4.6   | ) |  |  |  |   | 35.2    |   |  |  |  |   | (118.6  | ) |
| Earnings(loss) before income taxes and minorityinterests |  |  |        |   | 43.9    |        |  |  |                       |   | (60.6   | )                         |  |  |              |   | 21.1    |              |  |  |  |   | 117.4  |   |  |  |  |   | (49.8   | ) |  |  |  |   | 72.0    |   |
| Incometax provision(benefit)                             |  |  |        |   | — |        |  |  |                       |   | (21.9   | )                         |  |  |              |   | 8.0     |              |  |  |  |   | 42.0   |   |  |  |  |   | — |   |  |  |  |   | 28.1    |   |
| Minorityinterests                                        |  |  |        |   | (3.5    | )      |  |  |                       |   | — |                           |  |  |              |   | — |              |  |  |  |   | (3.5   | ) |  |  |  |   | 3.5     |   |  |  |  |   | (3.5    | ) |
| Netearnings(loss)                                        |  |  |        | $ | 40.4    |        |  |  |                       | $ | (38.7   | )                         |  |  |              | $ | 13.1    |              |  |  |  | $ | 71.9   |   |  |  |  | $ | (46.3   | ) |  |  |  | $ | 40.4    |   |
|                                                          |

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Nalco Holdings LLC andSubsidiariesCondensed Consolidating Statement ofOperationsSix Months ended June  30,2005(dollars inmillions)

|                                                          |  |  |        |   |         |        |  |  |                       |   |         |                           |  |  |              |   |         |              |  |  |  |   |        |   |  |  |  |   |         |   |  |  |  |   |         |   |
|----------------------------------------------------------|--|--|--------|---|---------|--------|--|--|-----------------------|---|---------|---------------------------|--|--|--------------|---|---------|--------------|--|--|--|---|--------|---|--|--|--|---|---------|---|--|--|--|---|---------|---|
|                                                     |  |  | Parent |   |         | Issuer |  |  | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |  | Eliminations |   |         | Consolidated |
| Netsales                                                 |  |  |        | $ | — |        |  |  |                       | $ | 562.4   |                           |  |  |              | $ | 308.2   |              |  |  |  | $ | 900.8  |   |  |  |  | $ | (157.5  | ) |  |  |  | $ | 1,613.9 |   |
| Operatingcosts andexpenses:                              |  |  |        |   |    |        |  |  |                       |   |    |                           |  |  |              |   |    |              |  |  |  |   |   |   |  |  |  |   |    |   |  |  |  |   |    |   |
| Costof productsold                                       |  |  |        |   | — |        |  |  |                       |   | 374.4   |                           |  |  |              |   | 203.8   |              |  |  |  |   | 472.4  |   |  |  |  |   | (157.5  | ) |  |  |  |   | 893.1   |   |
| Selling,administrative, and researchexpenses             |  |  |        |   | — |        |  |  |                       |   | 196.1   |                           |  |  |              |   | 59.4    |              |  |  |  |   | 265.5  |   |  |  |  |   | — |   |  |  |  |   | 521.0   |   |
| Amortizationof intangibleassets                          |  |  |        |   | — |        |  |  |                       |   | 16.6    |                           |  |  |              |   | 5.3     |              |  |  |  |   | 19.2   |   |  |  |  |   | — |   |  |  |  |   | 41.1    |   |
| Businessoptimizationexpenses                             |  |  |        |   | — |        |  |  |                       |   | 3.0     |                           |  |  |              |   | 0.5     |              |  |  |  |   | 14.3   |   |  |  |  |   | — |   |  |  |  |   | 17.8    |   |
| Totaloperating costs andexpenses                         |  |  |        |   | — |        |  |  |                       |   | 590.1   |                           |  |  |              |   | 269.0   |              |  |  |  |   | 771.4  |   |  |  |  |   | (157.5  | ) |  |  |  |   | 1,473.0 |   |
| Operatingearnings(loss)                                  |  |  |        |   | — |        |  |  |                       |   | (27.7   | )                         |  |  |              |   | 39.2    |              |  |  |  |   | 129.4  |   |  |  |  |   | — |   |  |  |  |   | 140.9   |   |
| Otherincome (expense),net                                |  |  |        |   | 16.8    |        |  |  |                       |   | 43.9    |                           |  |  |              |   | 11.7    |              |  |  |  |   | (39.6  | ) |  |  |  |   | (35.6   | ) |  |  |  |   | (2.8    | ) |
| Interestincome                                           |  |  |        |   | — |        |  |  |                       |   | 3.4     |                           |  |  |              |   | 4.9     |              |  |  |  |   | 19.4   |   |  |  |  |   | (23.6   | ) |  |  |  |   | 4.1     |   |
| Interestexpense                                          |  |  |        |   | — |        |  |  |                       |   | (125.4  | )                         |  |  |              |   | (6.5    | )            |  |  |  |   | (4.2   | ) |  |  |  |   | 23.6    |   |  |  |  |   | (112.5  | ) |
| Earnings(loss) before income taxes and minorityinterests |  |  |        |   | 16.8    |        |  |  |                       |   | (105.8  | )                         |  |  |              |   | 49.3    |              |  |  |  |   | 105.0  |   |  |  |  |   | (35.6   | ) |  |  |  |   | 29.7    |   |
| Incometax provision(benefit)                             |  |  |        |   | — |        |  |  |                       |   | (27.3   | )                         |  |  |              |   | 3.9     |              |  |  |  |   | 36.3   |   |  |  |  |   | — |   |  |  |  |   | 12.9    |   |
| Minorityinterests                                        |  |  |        |   | (2.8    | )      |  |  |                       |   | — |                           |  |  |              |   | — |              |  |  |  |   | (2.8   | ) |  |  |  |   | 2.8     |   |  |  |  |   | (2.8    | ) |
| Netearnings(loss)                                        |  |  |        | $ | 14.0    |        |  |  |                       | $ | (78.5   | )                         |  |  |              | $ | 45.4    |              |  |  |  | $ | 65.9   |   |  |  |  | $ | (32.8   | ) |  |  |  | $ | 14.0    |   |
|                                                          |

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Nalco Holdings LLC andSubsidiariesCondensed Consolidating Statement of Cash FlowsSix months ended June  30,  2006(dollars inmillions)

|                                                    |  |  |        |   |         |        |  |  |                       |   |         |                           |  |  |              |   |         |              |  |  |  |   |        |   |  |  |  |   |         |   |  |  |  |   |         |   |
|----------------------------------------------------|--|--|--------|---|---------|--------|--|--|-----------------------|---|---------|---------------------------|--|--|--------------|---|---------|--------------|--|--|--|---|--------|---|--|--|--|---|---------|---|--|--|--|---|---------|---|
|                                               |  |  | Parent |   |         | Issuer |  |  | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |  | Eliminations |   |         | Consolidated |
| Operatingactivities                                |  |  |        |   |    |        |  |  |                       |   |    |                           |  |  |              |   |    |              |  |  |  |   |   |   |  |  |  |   |    |   |  |  |  |   |    |   |
| Netearnings(loss)                                  |  |  |        | $ | 40.4    |        |  |  |                       | $ | (38.7   | )                         |  |  |              | $ | 13.1    |              |  |  |  | $ | 71.9   |   |  |  |  | $ | (46.3   | ) |  |  |  | $ | 40.4    |   |
| Non-cashadjustments                                |  |  |        |   | (40.4   | )      |  |  |                       |   | (0.5    | )                         |  |  |              |   | 9.1     |              |  |  |  |   | 63.8   |   |  |  |  |   | 43.2    |   |  |  |  |   | 75.2    |   |
| Changesin operating assets andliabilities          |  |  |        |   | — |        |  |  |                       |   | (23.2   | )                         |  |  |              |   | (0.7    | )            |  |  |  |   | (29.9  | ) |  |  |  |   | — |   |  |  |  |   | (53.8   | ) |
| Netcash provided by (used for) operatingactivities |  |  |        |   | — |        |  |  |                       |   | (62.4   | )                         |  |  |              |   | 21.5    |              |  |  |  |   | 105.8  |   |  |  |  |   | (3.1    | ) |  |  |  |   | 61.8    |   |
| Investingactivities                                |  |  |        |   |    |        |  |  |                       |   |    |                           |  |  |              |   |    |              |  |  |  |   |   |   |  |  |  |   |    |   |  |  |  |   |    |   |
| Additionsto property, plant, and equipment,net     |  |  |        |   | — |        |  |  |                       |   | (18.3   | )                         |  |  |              |   | (0.2    | )            |  |  |  |   | (19.0  | ) |  |  |  |   | — |   |  |  |  |   | (37.5   | ) |
| Other                                              |  |  |        |   | — |        |  |  |                       |   | (4.3    | )                         |  |  |              |   | (19.0   | )            |  |  |  |   | (93.5  | ) |  |  |  |   | 112.4   |   |  |  |  |   | (4.4    | ) |
| Netcash provided by (used for) investingactivities |  |  |        |   | — |        |  |  |                       |   | (22.6   | )                         |  |  |              |   | (19.2   | )            |  |  |  |   | (112.5 | ) |  |  |  |   | 112.4   |   |  |  |  |   | (41.9   | ) |
| Financingactivities                                |  |  |        |   |    |        |  |  |                       |   |    |                           |  |  |              |   |    |              |  |  |  |   |   |   |  |  |  |   |    |   |  |  |  |   |    |   |
| Cashdividends                                      |  |  |        |   | — |        |  |  |                       |   | — |                           |  |  |              |   | (2.8    | )            |  |  |  |   | (0.3   | ) |  |  |  |   | 3.1     |   |  |  |  |   | — |   |
| Netborrowings (repayments) ofdebt                  |  |  |        |   | — |        |  |  |                       |   | 86.1    |                           |  |  |              |   | — |              |  |  |  |   | 6.6    |   |  |  |  |   | (110.1  | ) |  |  |  |   | (17.4   | ) |
| Capitalcontributions                               |  |  |        |   | — |        |  |  |                       |   | — |                           |  |  |              |   | — |              |  |  |  |   | 2.3    |   |  |  |  |   | (2.3    | ) |  |  |  |   | — |   |
| Other                                              |  |  |        |   | — |        |  |  |                       |   | (0.8    | )                         |  |  |              |   | — |              |  |  |  |   | (1.4   | ) |  |  |  |   | — |   |  |  |  |   | (2.2    | ) |
| Netcash provided by (used for) financingactivities |  |  |        |   | — |        |  |  |                       |   | 85.3    |                           |  |  |              |   | (2.8    | )            |  |  |  |   | 7.2    |   |  |  |  |   | (109.3  | ) |  |  |  |   | (19.6   | ) |
| Effectof exchange rate changes oncash              |  |  |        |   | — |        |  |  |                       |   | — |                           |  |  |              |   | — |              |  |  |  |   | 0.5    |   |  |  |  |   | — |   |  |  |  |   | 0.5     |   |
| Increase(decrease) incash                          |  |  |        |   | — |        |  |  |                       |   | 0.3     |                           |  |  |              |   | (0.5    | )            |  |  |  |   | 1.0    |   |  |  |  |   | — |   |  |  |  |   | 0.8     |   |
| Cashat beginning ofperiod                          |  |  |        |   | — |        |  |  |                       |   | — |                           |  |  |              |   | 1.7     |              |  |  |  |   | 29.1   |   |  |  |  |   | — |   |  |  |  |   | 30.8    |   |
| Cashat end ofperiod                                |  |  |        | $ | — |        |  |  |                       | $ | 0.3     |                           |  |  |              | $ | 1.2     |              |  |  |  | $ | 30.1   |   |  |  |  | $ | — |   |  |  |  | $ | 31.6    |   |
|                                                    |

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Nalco Holdings LLC andSubsidiariesCondensed Consolidating Statement of Cash FlowsSix Months ended June  30,  2005(dollars inmillions)

|                                                    |  |  |        |   |         |        |  |  |                       |   |         |                           |  |  |              |   |         |              |  |  |  |   |         |   |  |  |  |   |         |   |  |  |  |   |         |   |
|----------------------------------------------------|--|--|--------|---|---------|--------|--|--|-----------------------|---|---------|---------------------------|--|--|--------------|---|---------|--------------|--|--|--|---|---------|---|--|--|--|---|---------|---|--|--|--|---|---------|---|
|                                               |  |  | Parent |   |         | Issuer |  |  | GuarantorSubsidiaries |   |         | Non-GuarantorSubsidiaries |  |  | Eliminations |   |         | Consolidated |
| Operatingactivities                                |  |  |        |   |    |        |  |  |                       |   |    |                           |  |  |              |   |    |              |  |  |  |   |    |   |  |  |  |   |    |   |  |  |  |   |    |   |
| Netearnings(loss)                                  |  |  |        | $ | 14.0    |        |  |  |                       | $ | (78.5   | )                         |  |  |              | $ | 45.4    |              |  |  |  | $ | 66.0    |   |  |  |  | $ | (32.9   | ) |  |  |  | $ | 14.0    |   |
| Non-cashadjustments                                |  |  |        |   | (14.0   | )      |  |  |                       |   | 38.7    |                           |  |  |              |   | 24.3    |              |  |  |  |   | 58.5    |   |  |  |  |   | 14.8    |   |  |  |  |   | 122.3   |   |
| Changesin operating assets andliabilities          |  |  |        |   | — |        |  |  |                       |   | 8.5     |                           |  |  |              |   | (55.5   | )            |  |  |  |   | (58.7   | ) |  |  |  |   | (0.2    | ) |  |  |  |   | (105.9  | ) |
| Netcash provided by (used for) operatingactivities |  |  |        |   | — |        |  |  |                       |   | (31.3   | )                         |  |  |              |   | 14.2    |              |  |  |  |   | 65.8    |   |  |  |  |   | (18.3   | ) |  |  |  |   | 30.4    |   |
| Investingactivities                                |  |  |        |   |    |        |  |  |                       |   |    |                           |  |  |              |   |    |              |  |  |  |   |    |   |  |  |  |   |    |   |  |  |  |   |    |   |
| Acquisitionof Ondeo NalcoGroup                     |  |  |        |   | — |        |  |  |                       |   | (3.2    | )                         |  |  |              |   | — |              |  |  |  |   | — |   |  |  |  |   | — |   |  |  |  |   | (3.2    | ) |
| Additionsto property, plant, and equipment,net     |  |  |        |   | — |        |  |  |                       |   | (8.4    | )                         |  |  |              |   | (4.8    | )            |  |  |  |   | (11.8   | ) |  |  |  |   | — |   |  |  |  |   | (25.0   | ) |
| Otherinvestingactivities                           |  |  |        |   | — |        |  |  |                       |   | (2.1    | )                         |  |  |              |   | (7.1    | )            |  |  |  |   | (16.5   | ) |  |  |  |   | 25.1    |   |  |  |  |   | (0.6    | ) |
| Netcash provided by (used for) investingactivities |  |  |        |   | — |        |  |  |                       |   | (13.7   | )                         |  |  |              |   | (11.9   | )            |  |  |  |   | (28.3   | ) |  |  |  |   | 25.1    |   |  |  |  |   | (28.8   | ) |
| Financingactivities                                |  |  |        |   |    |        |  |  |                       |   |    |                           |  |  |              |   |    |              |  |  |  |   |    |   |  |  |  |   |    |   |  |  |  |   |    |   |
| Cashdividends                                      |  |  |        |   | — |        |  |  |                       |   | — |                           |  |  |              |   | (1.3    | )            |  |  |  |   | (16.8   | ) |  |  |  |   | 18.1    |   |  |  |  |   | — |   |
| Netborrowings (repayments) ofdebt                  |  |  |        |   | — |        |  |  |                       |   | 45.1    |                           |  |  |              |   | 0.5     |              |  |  |  |   | (12.1   | ) |  |  |  |   | (23.2   | ) |  |  |  |   | 10.3    |   |
| Capitalcontributions                               |  |  |        |   | — |        |  |  |                       |   | — |                           |  |  |              |   | — |              |  |  |  |   | 1.7     |   |  |  |  |   | (1.7    | ) |  |  |  |   | — |   |
| Otherfinancingactivities                           |  |  |        |   | — |        |  |  |                       |   | (1.3    | )                         |  |  |              |   | — |              |  |  |  |   | (3.1    | ) |  |  |  |   | — |   |  |  |  |   | (4.4    | ) |
| Netcash provided by (used for) financingactivities |  |  |        |   | — |        |  |  |                       |   | 43.8    |                           |  |  |              |   | (0.8    | )            |  |  |  |   | (30.3   | ) |  |  |  |   | (6.8    | ) |  |  |  |   | 5.9     |   |
| Effectof exchange rate changes oncash              |  |  |        |   | — |        |  |  |                       |   | — |                           |  |  |              |   | — |              |  |  |  |   | (1.3    | ) |  |  |  |   | — |   |  |  |  |   | (1.3    | ) |
| Increase(decrease) incash                          |  |  |        |   | — |        |  |  |                       |   | (1.2    | )                         |  |  |              |   | 1.5     |              |  |  |  |   | 5.9     |   |  |  |  |   | — |   |  |  |  |   | 6.2     |   |
| Cashat beginning ofperiod                          |  |  |        |   | — |        |  |  |                       |   | 1.3     |                           |  |  |              |   | 0.8     |              |  |  |  |   | 31.1    |   |  |  |  |   | — |   |  |  |  |   | 33.2    |   |
| Cashat end ofperiod                                |  |  |        | $ | — |        |  |  |                       | $ | 0.1     |                           |  |  |              | $ | 2.3     |              |  |  |  | $ | 37.0    |   |  |  |  | $ | — |   |  |  |  | $ | 39.4    |   |
|                                                    |

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

OnNovember  4,  2003, Nalco Holdings LLC, a company formed byThe Blackstone Group, Apollo Management, L.P. and GS Capital Partners(the ‘‘Sponsors’’), purchased all of theoutstanding shares of capital stock of Ondeo Nalco Company (which isnow known as Nalco Company) and the Nalco International SASSubsidiaries, which had been operated as a single business unit, fromsubsidiaries of Suez S.A. (Suez). In the following discussion andanalysis, we refer to this acquisition as the‘‘Acquisition,’’ and the term‘‘Transactions’’ means, collectively, theAcquisition and the related financings to fund theAcquisition.

The statements in the discussion andanalysis regarding industry outlook, our expectations regarding theperformance of our business and the other non-historical statements inthe discussion and analysis are forward-looking statements. Theseforward-looking statements are subject to numerous risks anduncertainties. Our actual results may differ materially from thosecontained in or implied by any forward-looking statements. You shouldread the following discussion together with the consolidated financialstatements of Nalco Holdings LLC included elsewhere in thisreport.

‘‘Safe Harbor’’Statement Under Private Securities Litigation Reform Act of1995

This Quarterly Report for the fiscal quarter endedJune  30,  2006 (the ‘‘QuarterlyReport’’) includes ‘‘forward-lookingstatements’’ within the meaning of Section 27A of theSecurities Act of 1933 and Section 21E of the Securities Exchange Actof 1934. These forward-looking statements include statements concerningour plans, objectives, goals, strategies, future events, future revenueor performance, capital expenditures, financing needs, plans orintentions relating to acquisitions, business trends and otherinformation that is not historical information. When used in thisQuarterly Report, the words ‘‘estimates,’’‘‘expects,’’‘‘anticipates,’’‘‘projects,’’‘‘plans,’’‘‘intends,’’ ‘‘believes,’’ ‘‘forecasts,’’ orfuture 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.

There are a number of risks and uncertainties that couldcause our actual results to differ materially from the forward-lookingstatements contained in this Quarterly Report. Additionally, importantfactors could 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, amongothers:

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

|  |              |                                                                                       |
|--|--------------|---------------------------------------------------------------------------------------|
|  | •  | limitations on flexibility inoperating our business contained in our debt agreements; |

|  |              |                                                                           |
|--|--------------|---------------------------------------------------------------------------|
|  | •  | increases in interest rates as a result ofour variable rate indebtedness; |

|  |              |                                     |
|--|--------------|-------------------------------------|
|  | •  | pricingpressure from our customers; |

|  |              |                                                                                                                                                                                                      |
|--|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | changes to,or elimination of, legal or regulatory requirements imposed upon ourcustomers which could adversely affect portions of our business, suchas that which serves the synthetic-fuelindustry; |

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

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

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

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

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

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

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

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

|  |              |                                                   |
|--|--------------|---------------------------------------------------|
|  | •  | difficulties in securing theraw materials we use; |

|  |              |                                                                                              |
|--|--------------|----------------------------------------------------------------------------------------------|
|  | •  | our significantpension benefit obligations and the current underfunding in our pensionplans; |

|  |              |                                                                |
|--|--------------|----------------------------------------------------------------|
|  | •  | our ability to realize the fullvalue of our intangible assets; |

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

|  |              |                                                             |
|--|--------------|-------------------------------------------------------------|
|  | •  | our ability to protect ourintellectual property rights; and |

|  |              |                                                                                  |
|--|--------------|----------------------------------------------------------------------------------|
|  | •  | thepossibility that our owners’ interests will conflict with oursor yours. |

There may be other factors that may cause ouractual results to differ materially from the forward-lookingstatements.

All forward-looking statements attributableto us or persons acting on our behalf apply only as of the date of thisQuarterly Report and are expressly qualified in their entirety by thecautionary statements included in this Quarterly Report. We undertakeno obligation to update or revise forward-looking statements which maybe made to reflect events or circumstances that arise after the datemade or to reflect the occurrence of unanticipated events.

Useof Non-GAAP Financial Measures

EBITDA, Adjusted EBITDAand Free Cash Flow are measures used by management to measure operatingperformance. Adjusted EBITDA is also used to determine our compliancewith financial covenants and our ability to engage in certainactivities such as incurring additional debt and making certainpayments.

EBITDA is defined as net earnings plusinterest, taxes, depreciation and amortization. Adjusted EBITDA isdefined as EBITDA further adjusted for certain cash and non-cashcharges, as permitted under our senior discount note, senior note andsenior subordinated note indentures and our senior credit facility.Free Cash Flow is defined as net cash provided by operating activities,less capital expenditures and minority interest charges.

We believe EBITDA is useful to the investors because it isfrequently used by securities analysts, investors and other interestedparties in the evaluation of companies in our industry. We consider theinclusion of supplementary adjustments to EBITDA applied in presentingAdjusted EBITDA appropriate to provide additional information toinvestors to demonstrate compliance with our financing covenants. Webelieve Free Cash Flow provides investors with a measure of our abilityto generate cash for the repayment of debt.

EBITDA,Adjusted EBITDA and Free Cash Flow are not recognized terms under U.S.GAAP and do not purport to be alternatives to net earnings (loss) as anindicator of operating performance or to cash flows from operatingactivities as a measure of liquidity. The most direct comparable GAAPfinancial measures of each non-GAAP financial measure, as well as thereconciliation between each non-GAAP financial measure and the GAAPfinancial measure, are presented in the discussions of the non-GAAPfinancial measures. Because not all companies use identicalcalculations, our measures may not be comparable to other similarlytitled measures of other companies.

Executive LevelOverview

Significantly improved second quarter financialperformance was led by strong growth and margin expansion inNalco’s Energy Services business. Nalco sales grew 6.5%to $891.0  million, including 6.0% organic growth and0.5% in favorable foreign currency translation rate changes fromprior-year 

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

revenues of $836.3  million. Organicgrowth excludes the impacts of changes in foreign currency translationrates and acquisitions and divestitures. Price contributed about$32  million, or 3.8%, to organic growth in the quarter.Real sales growth – organic growth less price that simply passeson higher costs – was 2.2%.

Net earningsincreased to $26.8  million from the prior-year loss of$2.1  million. Earnings include after tax charges of $4.6million for business process optimization, reimbursed benefit plancontributions and unusual charges. These same charges were $13.8million in the prior-year period.

Adjusted EBITDA, whichis used to determine compliance with the Company’s debtcovenants, improved 23.2% to $160.1  million from theprior year’s $130.0  million. Second quarter results weresolid. Despite this strength, we caution against over-optimism asunusual items that lowered comparable 2005 results – includinginventory write-offs – played an important role in ourquarter-on-quarter percentage increases.

Purchasedmaterial and freight costs were about $23  million higher thanthe year-ago period. In the past two years, cumulative purchasedmaterial and freight cost increases of about $252  million havetotaled $22  million more than the $230  million Nalco hasobtained in price increases. We will continue to close that gap anddrive additional margin gains through productivity.

Weare pleased with the real growth and price achievement in the quartershown by our Energy Services business, which ran ahead of ourexpectations. Much of our remaining business was stable, but short ofour real growth and price expectations. In short, our segment resultsare as follows:

|  |              |                                                                                                                                                                                                                                                                                                                                            |
|--|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | Energy Services ledsecond quarter growth efforts with 16.2% organic salesimprovement, including strong real growth in each of our primary endmarkets – which include refineries, petrochemical processing, andoil & gas exploration and production. Price played an importantrole in significant margin expansion in thesegment. |

|  |              |                                                                                                                                                                                                                                                                                                                                                                                                      |
|--|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | Organic sales in the Industrialand Institutional Services segment were up modestly at 2.6%.Sales improvement was hampered by declines in our European watertreatment business, as well as reduced sales to synfuel producers dueto reduced tax benefits in this area. Profitability in the quarterremained stable as higher operating expenses largely offset modestsales and gross earnings growth. |

|  |              |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|--|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | PaperServices organic revenues were flat. European operations were the weakpoint as customer closures and business lost due to price initiativesdrove down results. Our business in North America appears to bestabilizing, but the strong growth levels we had been achieving inLatin America and Asia were not sustained in the quarter –providing no offset to weakness in Europe. The earnings decline in thebusiness appears modest, but year-ago results included $4.0million of inventory write-offs. |

|  |              |                                                                                                                                                                                                                                                                                                                                         |
|--|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | •  | Salesin the Other segment were up modestly in the quarter, largely driven bygood results in India. Profitability in the segment was substantiallyimproved from 2005, when we created significant volume variance chargeswhile cutting production to drive down inventory levels. Losses in thissegment returned to a more normal level. |

Free Cash Flowwas a negative $21.8  million in the quarter. The combination ofour accelerated pension contribution and our semi-annual cash interestpayments in May led to negative cash flow in the quarter. In April,Nalco added $45  million in funding to its U.S. pension plan.About $30  million of that funding would normally have been paidin the third and fourth quarters. Had we held to the original fundingcalendar, our Free Cash Flow would have been positive in the quarter.Net cash provided by operating activities is reconciled to Free CashFlow as follows:

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

|                                                |  |  |                               |   |       |                              |  |  |  |   |       |   |
|------------------------------------------------|--|--|-------------------------------|---|-------|------------------------------|--|--|--|---|-------|---|
| (dollarsin millions)                           |  |  | ThreeMonthsendedJune 30, 2006 |   |       | ThreeMonthsendedJune 30,2005 |
| Net cashprovided by operatingactivities        |  |  |                               | $ | 2.9   |                              |  |  |  | $ | 13.5  |   |
| Minorityinterests                              |  |  |                               |   | (1.8  | )                            |  |  |  |   | (1.6  | ) |
| Additions toproperty, plant, and equipment,net |  |  |                               |   | (22.9 | )                            |  |  |  |   | (12.7 | ) |
| Freecashflow                                   |  |  |                               | $ | (21.8 | )                            |  |  |  | $ | (0.8  | ) |
|                                                |

Inthe second quarter, we made improvements in receivables and inventories– from a days perspective – but those improvements wereoffset from a cash perspective by higher values of receivables andinventory and shrinkage in our payables. Capital expenditures of$22.9  million and $37.5  million for the quarter and yearto date, respectively, are in line with our expectations for just over$100  million in capital expenditures for the year. Nalco hashistorically been back-end-loaded in its capital expenditurespend.

Year-to-date Results

Nominal salesincreased 7.8% to $1,740.4  million from the year-earlier$1,613.9  million. Organically, sales grew 8.4%, including5% price attainment. Energy Services generated 17.1%organic revenue growth. Industrial and Institutional Services increasedorganic sales 7.5% and Paper Services organic sales increased2.3%. Modest organic sales improvement in the Other segment wasmore than offset by negative foreign currency impacts.

Regionally, our year-to-date sales growth is fairly welldistributed, with Latin America, North America and Asia Pacific all atnear 10% growth. Sales in Europe are increasing much moreslowly. Last year was exceptional for our business in Asia. Our currentfocus in that region is on properly servicing the business we haveobtained as we train the next group of sales and service engineers toinvigorate growth.

Net earnings increased to $40.4million from 2005 first half results of $14.0  million. AdjustedEBITDA in the first six months improved 10.3% to $304.0million from $275.5  million in the year-earlier period, and weeffect this level of improvement to be better in the second half.

Free Cash Flow stands at $20.8  million compared to theprior year’s $2.6  million. Net cash provided by operatingactivities is reconciled to Free Cash Flow asfollows:

|                                                |  |  |                            |   |       |                             |  |  |  |   |       |   |
|------------------------------------------------|--|--|----------------------------|---|-------|-----------------------------|--|--|--|---|-------|---|
| (dollarsin millions)                           |  |  | Six MonthsendedJune30,2006 |   |       | Six Monthsended June30,2005 |
| Net cash provided by operatingactivities       |  |  |                            | $ | 61.8  |                             |  |  |  | $ | 30.4  |   |
| Minorityinterests                              |  |  |                            |   | (3.5  | )                           |  |  |  |   | (2.8  | ) |
| Additions toproperty, plant, and equipment,net |  |  |                            |   | (37.5 | )                           |  |  |  |   | (25.0 | ) |
| Freecashflow                                   |  |  |                            | $ | 20.8  |                             |  |  |  | $ | 2.6   |   |
|                                                |

2006Outlook

Our sales growth projection for the year was fora 7% organic increase, of which more than half was expected tocome from price. That forecast still looks right. We believe thatEnergy Services will continue to be our primary growth driver in 2006,and expect to see better performance from Industrial and InstitutionalServices in the second half of the year and stability in PaperServices.

We remain committed to our Free Cash Flow targetof $170 million. From where we stand today, we need to deliver $150million in Free Cash Flow in the remaining six months. The largestportion of 

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

this remaining Free Cash Flow generation isexpected to come in the third quarter. Projected 2006 net cash providedby operating activities is reconciled to Free Cash Flow as follows:

|                                                |  |  |                                       |   |        |   |
|------------------------------------------------|--|--|---------------------------------------|---|--------|---|
| (dollarsin millions)                           |  |  | Projected Year ended December31, 2006 |
| Net cash provided by operatingactivities       |  |  |                                       | $ | 282.1  |   |
| Minorityinterests                              |  |  |                                       |   | (9.1   | ) |
| Additions to property,plant, and equipment,net |  |  |                                       |   | (103.0 | ) |
| Free cashflow                                  |  |  |                                       | $ | 170.0  |   |
|                                                |

Wehave our targets in sight, but there is clearly work to be done to hitthem. We need to continue to increase price, control expenses andinvigorate real growth beyond Energy Services to consider this a verysuccessful year.

Quarter Ended June  30,  2006Compared to the Quarter Ended June  30,2005

Net sales for the three months endedJune  30,  2006 were $891.0  million, a 6.5%increase from the $836.3  million reported for the three monthsended June  30,  2005. On an organic basis, which excludesthe impacts of changes in foreign currency translation rates andacquisitions and divestitures, net sales were up 6.0%. Of thisimprovement, 3.8% was attributed to price increase, while theremaining 2.2% was driven by real growth.

Grossprofit, defined as the difference between net sales andcost of product sold, of $395.4  million for the three monthsended June  30,  2006 increased by $39.4  million, or11.1%, over the $356.0  million for the three months endedJune  30,  2005. On an organic basis, gross profitincreased by $37.4  million, or 10.5%. Contributing to theimprovement was the impact of higher selling prices and sales volumes,partly offset by the effect of increased costs of raw and otherpurchased materials. The improvement was also partly attributable tounfavorable manufacturing volume variances resulting from our plan toreduce inventory levels during the quarter ended June  30,2005 and an inventory write-off of $10.7  million during thatperiod. Gross profit margin for the three months ended June30,  2006 was 44.4% compared to 42.6% for theyear-ago period.

Selling, administrative, and researchexpenses for the three months ended June  30,  2006 of$270.7  million increased $7.8  million, or 3.0%,from $262.9  million for the three months ended June30,  2005. On an organic basis, selling, administrative, andresearch expenses increased $6.9  million. This was mostlyattributable to higher selling expenses, primarily baddebts.

Business optimization expenses,representing mostly employee severance and related costs associatedwith the continuing redesign and optimization of business and workprocesses, were $1.8  million for the three months endedJune  30,  2006, a $15.2  million decrease from the$17.0  million for the three months ended June  30,2005. The three months ended June  30,  2005 included a$14.0  million charge to support a plan to delayer our managementstructure and reduce costs in lower-performing businessunits.

Amortization of intangible assets was$17.5  million and $20.5  million for the three monthsended June  30,  2006 and 2005, respectively. The decreasewas attributable to lower amortization of customer relationships, whichare amortized using an accelerated method.

Otherincome (expense), net unfavorably changed by $1.3  millionfrom the net expense of $0.6  million for the three months endedJune  30,  2005. This was largely the result of anunfavorable change in foreign exchange gains and losses period overperiod due to the weakening of the U.S. dollar versus the euro duringthe three months ended June  30,  2006. Improved earningsof our affiliated entities partly offset this unfavorabledifference.

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

Net interest expense,defined as the combination of interest income and interest expense, of$57.8  million for the three months ended June  30,2006 increased by $2.2  million from the $55.6  millionreported for the three months ended June  30,  2005. Theimpact of higher interest rates on variable rate borrowings more thanoffset the impact of a lower average debt level compared to theyear-ago period.

The effective tax rate for thethree months ended June  30,  2006 was 37.4%. Therate varies from the U.S. federal statutory income tax rate of35% primarily due to the incremental tax on dividends receivedfrom non-U.S. subsidiaries, foreign taxes provided at other than the35% U.S. statutory rate, U.S. state income taxes, nondeductibleexpenses, and other permanent differences.

Theaforementioned items also contributed to the variation between the U.S.federal statutory income tax rate and the Company’s effectiveincome tax rate for the three months ended June  30,2005.

Minority interest expense was $0.2million higher than the $1.6  million for the three months endedJune  30,  2005, which was mostly due to improved resultsfor the Company’s non-wholly owned subsidiaries in Saudi Arabiaand Japan.

Six Months Ended June  30,  2006Compared to the Six Months Ended June  30,2005

Net sales for the six months endedJune  30,  2006 were $1,740.4  million, a 7.8%increase from the $1,613.9  million reported for the six monthsended June  30,  2005. On an organic basis, which excludesthe impacts of changes in foreign currency translation rates andacquisitions and divestitures, net sales were up 8.4%. Of thisimprovement, 5.0% was attributed to price increase, while theremaining 3.4% was driven by real growth.

Grossprofit, defined as the difference between net sales andcost of product sold, of $773.7  million for the six months endedJune  30,  2006 increased by $52.9  million, or7.3%, over the $720.8  million for the six months endedJune  30,  2005. On an organic basis, gross profitincreased by $57.5  million, or 8.0%. Higher sales volumeand the impact of higher selling prices, partly offset by the effect ofincreased costs of raw and other purchased materials, contributed tothis change. The improvement was also partly attributable tounfavorable manufacturing volume variances resulting from our plan toreduce inventory levels during the six months ended June30,  2005 and an inventory write-off of $9.0  millionduring that period. Gross profit margin for the six months endedJune  30,  2006 was 44.5% compared to 44.7%for the year-ago period.

Selling, administrative, andresearch expenses for the six months ended June  30,2006 of $546.1  million increased $25.1  million, or4.8%, from $521.0  million for the six months endedJune  30,  2005. On an organic basis, selling,administrative, and research expenses increased $29.0  million.This was mainly attributable to selling expense, which was primarilydue to higher commission expenses ratably in line with increased sales,bad debts, and outside services. Administrative expense increased fromthe year-ago period due to higher outside services, most notablyconsulting.

Business optimization expenses,representing mostly employee severance and related costs associatedwith the continuing redesign and optimization of business and workprocesses, were $5.6  million for the six months endedJune  30,  2006, a $12.2  million decrease from the$17.8  million for the six months ended June  30,2005. The six months ended June  30,  2005 included a$14.0  million charge to support a plan to delayer our managementstructure and reduce costs in lower-performing businessunits.

Amortization of intangible assets was$34.8  million and $41.1  million for the six months endedJune  30,  2006 and 2005, respectively. The decrease wasattributable to lower amortization of customer relationships, which areamortized using an accelerated method.

Other income(expense), net favorably changed by $2.2  million from thenet expense of $2.8  million for the six months ended June30,  2005. A $2.4  million impairment loss on a businessheld for sale recorded during the six months ended June30,  2005 and a $1.8  million increase in equity inearnings of unconsolidated subsidiaries contributed to theimprovement.

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

Net interest expense,defined as the combination of interest income and interest expense, of$114.6  million for the six months ended June  30,2006 increased by $6.2  million from the $108.4  millionreported for the six months ended June  30,  2005. Theimpact of higher interest rates on variable rate borrowings more thanoffset the impact of a lower average debt level compared to theyear-ago period.

The effective tax rate for thesix months ended June  30,  2006 was 39.0%. The ratevaries from the U.S. federal statutory income tax rate of 35%primarily due to the incremental tax on dividends received fromnon-U.S. subsidiaries, foreign taxes provided at other than the35% U.S. statutory rate, U.S. state income taxes, nondeductibleexpenses, and other permanent differences.

Theaforementioned items also contributed to the variation between the U.S.federal statutory income tax rate and the Company’s effectiveincome tax rate for the six months ended June  30,2005.

Minority interest expense was $0.7million higher than the $2.8  million for the six months endedJune  30,  2005, reflecting improved results for theCompany’s non-wholly owned subsidiaries in Japan and SaudiArabia.

Results of Operations – SegmentReporting

Quarter Ended June  30,  2006Compared to the Quarter Ended June  30,2005

Net sales by reportable segment forthe three months ended June  30,  2006 and June30,  2005 may be compared asfollows:

|                                       |  |  |                   |   |       |              |  |  |                                                |   |       |                     |  |  |                           |  |      |         |  |  |  |  |      |    |  |  |  |  |         |  |  |  |  |  |      |   |
|---------------------------------------|--|--|-------------------|---|-------|--------------|--|--|------------------------------------------------|---|-------|---------------------|--|--|---------------------------|--|------|---------|--|--|--|--|------|----|--|--|--|--|---------|--|--|--|--|--|------|---|
|                                  |  |  | ThreeMonths Ended |   |       |         |  |  | Attributableto Changes in the FollowingFactors |
| (dollarsin millions)                  |  |  | June30,2006       |   |       | June 30,2005 |  |  | %Change                                        |   |       | CurrencyTranslation |  |  | Acquisitions/Divestitures |  |      | Organic |
| Industrial& InstitutionalServices |  |  |                   | $ | 389.4 |              |  |  |                                                | $ | 377.5 |                     |  |  |                           |  | 3.2  | %       |  |  |  |  | 0.6  | %  |  |  |  |  | — |  |  |  |  |  | 2.6  | % |
| EnergyServices                        |  |  |                   |   | 259.3 |              |  |  |                                                |   | 221.5 |                     |  |  |                           |  | 17.1 | %       |  |  |  |  | 0.9  | %  |  |  |  |  | — |  |  |  |  |  | 16.2 | % |
| PaperServices                         |  |  |                   |   | 178.1 |              |  |  |                                                |   | 176.1 |                     |  |  |                           |  | 1.1  | %       |  |  |  |  | 1.0  | %  |  |  |  |  | — |  |  |  |  |  | 0.1  | % |
| Other                                 |  |  |                   |   | 64.2  |              |  |  |                                                |   | 61.2  |                     |  |  |                           |  | 4.9  | %       |  |  |  |  | (2.6 | )% |  |  |  |  | — |  |  |  |  |  | 7.5  | % |
| Netsales                              |  |  |                   | $ | 891.0 |              |  |  |                                                | $ | 836.3 |                     |  |  |                           |  | 6.5  | %       |  |  |  |  | 0.5  | %  |  |  |  |  | — |  |  |  |  |  | 6.0  | % |
|                                       |

TheIndustrial and Institutional Services division reported sales of$389.4  million for the three months ended June  30,2006, an $11.9  million increase, or 3.2%, over the$377.5  million for the year-ago-period. Price increasesaccounted for the 2.6% organic change.

The EnergyServices division reported sales of $259.3  million for the threemonths ended June  30,  2006, a 17.1% gain over the$221.5  million for the three months ended June  30,2005. Organically, sales improved by 16.2%, with two-thirds ofthis increase attributed to real growth. All businesses within EnergyServices – Downstream, Adomite, and Oil Field – grew doubledigits in the quarter.

The Paper Services divisionreported sales of $178.1  million for the three months endedJune  30,  2006, a 1.1% increase over the$176.1  million reported for the second quarter of 2005. TheNorth American region reported positive organic growth as a result ofprice increases; however, overall the division’s organic saleswere flat. The European region continues to struggle with customerclosures and lost business due to the price-increaseinitiatives.

Direct contribution is defined asthe difference between net sales and operating costs, including cost ofproduct sold, selling and service expenses, marketing expenses,research expenses and capital charges. Direct contribution byreportable segment for the three months ended June  30,2006 and June  30,  2005 may be compared asfollows:

27

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

|                                       |  |  |                   |   |       |             |  |  |                                                |   |       |                     |  |  |                           |  |      |         |  |  |  |  |      |    |  |  |  |  |         |  |  |  |  |  |      |    |
|---------------------------------------|--|--|-------------------|---|-------|-------------|--|--|------------------------------------------------|---|-------|---------------------|--|--|---------------------------|--|------|---------|--|--|--|--|------|----|--|--|--|--|---------|--|--|--|--|--|------|----|
|                                  |  |  | ThreeMonths Ended |   |       |        |  |  | Attributableto Changes in the FollowingFactors |
| (dollars inmillions)                  |  |  | June 30,2006      |   |       | June30,2005 |  |  | %Change                                        |   |       | CurrencyTranslation |  |  | Acquisitions/Divestitures |  |      | Organic |
| Industrial& InstitutionalServices |  |  |                   | $ | 85.1  |             |  |  |                                                | $ | 82.9  |                     |  |  |                           |  | 2.6  | %       |  |  |  |  | 0.8  | %  |  |  |  |  | — |  |  |  |  |  | 1.8  | %  |
| EnergyServices                        |  |  |                   |   | 54.9  |             |  |  |                                                |   | 39.7  |                     |  |  |                           |  | 38.5 | %       |  |  |  |  | 1.3  | %  |  |  |  |  | — |  |  |  |  |  | 37.2 | %  |
| PaperServices                         |  |  |                   |   | 26.5  |             |  |  |                                                |   | 27.4  |                     |  |  |                           |  | (3.3 | )%      |  |  |  |  | 1.6  | %  |  |  |  |  | — |  |  |  |  |  | (4.9 | )% |
| Other                                 |  |  |                   |   | (14.9 | )           |  |  |                                                |   | (28.9 | )                   |  |  |                           |  | 48.6 | %       |  |  |  |  | (1.0 | )% |  |  |  |  | — |  |  |  |  |  | 49.6 | %  |
|                                       |

Directcontribution of the Industrial and Institutional Services division was$85.1  million for the three months ended June  30,2006, an increase of 2.6% over the $82.9  million reportedfor the three months ended June  30,  2005. Organically,direct contribution grew 1.8%. Higher operating expenses, mostlyin bad debts, offset gross earnings improvement.

TheEnergy Services division reported direct contribution of $54.9million for the three months ended June  30,  2006, a38.5% increase over the $39.7  million reported for theyear-ago period. On an organic basis, direct contribution increased37.2%. Higher sales volume accounted for most of the increase.Gross profit margins improved as planned price increases took effectand operating expenses were brought under control, with the onlynotable increase in commissions.

The Paper Servicesdivision reported direct contribution of $26.5  million for thethree months ended June  30,  2006, a 3.3% decreasefrom the direct contribution reported for the three months endedJune  30,  2005. Organically, direct contribution was down4.9%, as costs of raw and other purchased materials continued toexceed price increases. Despite tight controls on spending, operatingexpenses were nearly flat on a period-on-period basis due to asignificant increase in bad debts.

The directcontribution loss of $14.9  million reported in‘‘Other’’ for the three months endedJune  30,  2006, represented a decrease of $14.0million from the $28.9  million direct contribution loss reportedin the second quarter 2005. Significant contributors to theyear-over-year change include supply chain variances, including volumevariance charges that were incurred during the second quarter of 2005as a result of cutting production to reduce inventory levels.

Also contributing to the variations in direct contributionfor each of the segments above was the favorable change resulting frominventory write-offs during the three months ended June30,  2005. During that period, $4.0  million, $3.1million, $2.4  million, and $1.2  million was charged toPaper Services, Other, Energy Services, and Industrial andInstitutional Services, respectively.

Six Months EndedJune  30,  2006 Compared to Six Months Ended June30,  2005

Net sales by reportablesegment for the six months ended June  30,  2006 andJune  30,  2005 may be compared asfollows:

|                                       |  |  |                 |   |         |              |  |  |                                                |   |         |                     |  |  |                           |  |      |         |  |  |  |  |      |    |  |  |  |  |         |  |  |  |  |  |      |   |
|---------------------------------------|--|--|-----------------|---|---------|--------------|--|--|------------------------------------------------|---|---------|---------------------|--|--|---------------------------|--|------|---------|--|--|--|--|------|----|--|--|--|--|---------|--|--|--|--|--|------|---|
|                                  |  |  | Sixmonths Ended |   |         |         |  |  | Attributable toChanges in the FollowingFactors |
| (dollarsin millions)                  |  |  | June30,2006     |   |         | June 30,2005 |  |  | %Change                                        |   |         | CurrencyTranslation |  |  | Acquisitions/Divestitures |  |      | Organic |
| Industrial& InstitutionalServices |  |  |                 | $ | 767.8   |              |  |  |                                                | $ | 718.5   |                     |  |  |                           |  | 6.9  | %       |  |  |  |  | (0.6 | )% |  |  |  |  | — |  |  |  |  |  | 7.5  | % |
| EnergyServices                        |  |  |                 |   | 505.6   |              |  |  |                                                |   | 432.1   |                     |  |  |                           |  | 17.0 | %       |  |  |  |  | (0.1 | )% |  |  |  |  | — |  |  |  |  |  | 17.1 | % |
| PaperServices                         |  |  |                 |   | 353.9   |              |  |  |                                                |   | 346.2   |                     |  |  |                           |  | 2.2  | %       |  |  |  |  | (0.1 | )% |  |  |  |  | — |  |  |  |  |  | 2.3  | % |
| Other                                 |  |  |                 |   | 113.1   |              |  |  |                                                |   | 117.1   |                     |  |  |                           |  | (3.4 | )%      |  |  |  |  | (4.0 | )% |  |  |  |  | — |  |  |  |  |  | 0.6  | % |
| Netsales                              |  |  |                 | $ | 1,740.4 |              |  |  |                                                | $ | 1,613.9 |                     |  |  |                           |  | 7.8  | %       |  |  |  |  | (0.6 | )% |  |  |  |  | — |  |  |  |  |  | 8.4  | % |
|                                       |

TheIndustrial and Institutional Services division posted sales of$767.8  million for the six months ended June  30,2006, an increase of $49.3  million, or 6.9%, over the$718.5  million for the year-ago-period. Price increasesaccounted for slightly more than three-fourths of the 7.5%organic increase in sales.

28

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

The Energy Services divisionreported sales of $505.6  million for the six months endedJune  30,  2006, a 17.0% gain over the $432.1million for the six months ended June  30,  2005. Salesimproved by 17.1% on an organic basis, with slightly more thattwo-thirds of this improvement attributed to real growth.

The Paper Services division posted sales of $353.9million for the six months ended June  30,  2006, a2.2% increase over the $346.2  million reported for thefirst half of 2005. On an organic basis, sales were up 2.3%, asgains from price increases were partly offset by lower sales inEurope.

The 0.6% organic increase in sales reportedby the Other segment was mostly attributable to our Integrated Channelsbusiness unit and our subsidiary in India.

Directcontribution is defined as the difference between net sales andoperating costs, including cost of product sold, selling and serviceexpenses, marketing expenses, research expenses and capital charges.Direct contribution by reportable segment for the six months endedJune  30,  2006 and June  30,  2005 may becompared asfollows:

|                                       |  |  |                 |   |       |              |  |  |                                                |   |       |                     |  |  |                           |  |      |         |  |  |  |  |      |    |  |  |  |  |         |  |  |  |  |  |         |    |
|---------------------------------------|--|--|-----------------|---|-------|--------------|--|--|------------------------------------------------|---|-------|---------------------|--|--|---------------------------|--|------|---------|--|--|--|--|------|----|--|--|--|--|---------|--|--|--|--|--|---------|----|
|                                  |  |  | Sixmonths Ended |   |       |         |  |  | Attributable toChanges in the FollowingFactors |
| (dollarsin millions)                  |  |  | June30,2006     |   |       | June 30,2005 |  |  | %Change                                        |   |       | CurrencyTranslation |  |  | Acquisitions/Divestitures |  |      | Organic |
| Industrial& InstitutionalServices |  |  |                 | $ | 164.9 |              |  |  |                                                | $ | 148.4 |                     |  |  |                           |  | 11.1 | %       |  |  |  |  | (0.7 | )% |  |  |  |  | — |  |  |  |  |  | 11.8    | %  |
| EnergyServices                        |  |  |                 |   | 103.2 |              |  |  |                                                |   | 82.7  |                     |  |  |                           |  | 24.9 | %       |  |  |  |  | (0.1 | )% |  |  |  |  | — |  |  |  |  |  | 25.0    | %  |
| PaperServices                         |  |  |                 |   | 52.6  |              |  |  |                                                |   | 57.5  |                     |  |  |                           |  | (8.5 | )%      |  |  |  |  | 0.4  | %  |  |  |  |  | — |  |  |  |  |  | (8.9    | )% |
| Other                                 |  |  |                 |   | (34.3 | )            |  |  |                                                |   | (34.1 | )                   |  |  |                           |  | (0.6 | )%      |  |  |  |  | (0.6 | )% |  |  |  |  | — |  |  |  |  |  | — |    |
|                                       |

Directcontribution of the Industrial and Institutional Services division was$164.9  million for the six months ended June  30,2006, an increase of 11.1% over the $148.4  millionreported for the six months ended June  30,  2005.Organically, direct contribution improved 11.8%. The Industrialand Institutional Services division’s success in implementingprice increases and controlling operating expenses contributed to theperiod-on-period performance improvement.

The EnergyServices division reported direct contribution of $103.2  millionfor the six months ended June  30,  2006, a 24.9%increase over the $82.7  million reported for the prior yearperiod. On an organic basis, direct contribution increased25.0%. Higher sales volume accounted for most of the increase.Operating expenses were brought under control during the second quarter2006, with the only notable expense increases in commissions andoutside services.

The Paper Services division reporteddirect contribution of $52.6  million for the six months endedJune  30,  2006, an 8.5% decrease from the$57.5  million direct contribution reported for the six monthsended June  30,  2005. Organically, direct contribution wasdown 8.9%, as costs of raw and other purchased materialscontinued to exceed price increases. Despite tight controls onspending, operating expenses were flat on a year-over-year basis due toa significant increase in bad debts.

The directcontribution loss of $34.3  million reported in‘‘Other’’ for the six months endedJune  30,  2006, represented an increase of $0.2million from the $34.1  million direct contribution loss reportedin the six months ended June  30,  2005. Significantcontributors to the year-over-year change include supply chainvariances that benefited 2006 results, favorable adjustments in 2005for commissions and insurance/legal claims that did not recur in 2006,and the net impact of revenue deferrals for shipments made near the endof the period.

Liquidity and CapitalResources

Operatingactivities.    Historically, the Company’s main sourceof liquidity has been its solid cash flow generated by operatingactivities. For the six months ended June  30,  2006, cashprovided by operating activities was $61.8  million, a$31.4  million increase from the same period last year. Theimprovement was mainly the result of the increase in net earnings andnot making any payments in 2006 for 2005 variable incentive plans.Partly offsetting these improvements were higher contributions to theprincipal U.S. pension plan.

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

Investingactivities.    Cash used for investing activities was$41.9  million for the six months ended June  30,2006, which was mostly attributable to net property additions of$37.5  million.

Cash used for investing activitieswas $28.8  million for the six months ended June30,  2005. This was mostly the result of net property additionsof $25.0  million.

Financingactivities.    Net cash used for financing activities totaled$19.6  million during the six months ended June  30,2006, which was mostly attributable to a net decrease inborrowings.

Net cash provided by financing activitiestotaled $5.9  million during the six months ended June30,  2005. This was primarily comprised of a net increase inborrowings.

Since the Transactions, we have been highlyleveraged. Our liquidity requirements are significant, primarily due todebt service requirements as well as research and development andcapital investment. Our primary source of liquidity will continue to becash flow generated from operations, but we also have availabilityunder a $250  million revolving credit facility and a $100million receivables facility, in each case subject to certainconditions. We believe that our financial position and financingstructure will provide flexibility in worldwide financing activitiesand permit us to respond to changing conditions in creditmarkets.

Senior credit facilities.    OnNovember  4,  2003, we entered into senior creditfacilities which provided for a revolving 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 Bfacility which matures in November  2010. Borrowings under thesenior credit facilities bear interest at a floating base rate plus anapplicable margin. The applicable margin for borrowings under therevolving credit facility and the term loan A facility is 1.50%with respect to base rate borrowings and 2.50% with respect toLIBOR or Eurocurrency borrowings and may be reduced subject to ourattaining certain leverage ratios. The applicable margin for borrowingsunder the term loan B facility is 0.75% with respect to baserate borrowings and 1.75% with respect to LIBOR or Eurocurrencyborrowings. The applicable margin for borrowings under the term loan Bfacility is not subject to adjustment.

In addition topaying interest on outstanding principal under the senior creditfacilities, we are required to pay a commitment fee to the lendersunder the revolving credit facility in respect of the unutilizedcommitments at a rate equal to 0.50%. We also pay customaryletter of credit fees.

The term loan A facility willamortize each year in quarterly amounts at a rate of 5% perannum in year one, 10% per annum in year two, 15% perannum in year three, 20% per annum in year four and 25%per annum in each of years five and six.

The term loan Bfacility will amortize each year in an amount equal to 1% perannum in equal quarterly installments for the first six years and ninemonths, with the remaining amount payable on November  4,2010.

At June  30,  2006, the outstandingbalance of the term loan A and term loan B facilities was $78.5million and $1,071.0  million,respectively.

Principal amounts outstanding under therevolving credit facility will be due and payable in full at maturityon November  4,  2009. At June  30,  2006, ouroutstanding borrowing under the revolving credit facility was$25.0  million.

The senior credit facilitiescontain a number of covenants that, among other things, restrict,subject to certain exceptions, our ability and the ability of oursubsidiaries (including Nalco Company) to sell assets, incur additionalindebtedness or issue preferred stock, repay other indebtedness, paydividends and distributions or repurchase certain capital stock, createliens on assets, make investments, loans or advances, make certainacquisitions, engage in mergers or consolidations, enter into sale andleaseback transactions, engage in certain transactions with affiliates,amend certain material agreements 

30

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

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 June  30,2006.

Senior notes and senior subordinatednotes.    As part of the Transactions in November  2003,Nalco Company issued $665  million aggregate principal amount of73⁄4% U.S. dollar-denominated senior notes due2011, €200  million aggregate principal amount of73⁄4% euro-denominated senior notes due 2011,$465  million aggregate principal amount of8 7/8% U.S. dollar-denominated seniorsubordinated notes due 2013 and €200  millionaggregate principal amount of 9% euro-denominated seniorsubordinated notes due 2013.

The indentures governing thesenior notes and the senior subordinated notes limit our ability andthe ability of our restricted subsidiariesto:

|  |              |                               |
|--|--------------|-------------------------------|
|  | •  | incur additionalindebtedness; |

|  |              |                                                                                 |
|--|--------------|---------------------------------------------------------------------------------|
|  | •  | pay dividends on or makeother distributions or repurchase certain capitalstock; |

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

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

|  |              |                                                                 |
|--|--------------|-----------------------------------------------------------------|
|  | •  | limitdividends or other payments by our restrictedsubsidiaries; |

|  |              |                                                  |
|--|--------------|--------------------------------------------------|
|  | •  | use assets as security inother transactions; and |

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

Subject tocertain exceptions, the indentures governing the senior notes and thesenior subordinated notes permit the Company and our restrictedsubsidiaries to incur additional indebtedness, including securedindebtedness.

Covenant compliance.    Thebreach of covenants in our senior credit agreement that are tied toratios based on Adjusted EBITDA could result in a default under thatagreement and the lenders could elect to declare all amounts borroweddue and payable. Any such acceleration would also result in a defaultunder our indentures. Additionally, under our debt agreements, ourability to engage in activities such as incurring additionalindebtedness, making investments and paying dividends is also tied toratios based on Adjusted EBITDA.

Adjusted EBITDA is usedto determine our compliance with many of the covenants contained in theindentures governing the notes and in our senior credit agreement.Adjusted EBITDA is defined as EBITDA further adjusted to excludeunusual items 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.

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

Adjusted EBITDA is calculated asfollows:

|                                 |  |  |                               |   |       |                                |  |  |                               |   |       |                              |  |  |  |   |       |   |  |  |  |   |       |   |
|---------------------------------|--|--|-------------------------------|---|-------|--------------------------------|--|--|-------------------------------|---|-------|------------------------------|--|--|--|---|-------|---|--|--|--|---|-------|---|
| (dollarsin millions)            |  |  | Three MonthsendedJune 30,2006 |   |       | Three Months ended June30,2005 |  |  | Six Months ended June 30,2006 |   |       | Six Monthsended June 30,2005 |
| Net earnings(loss)              |  |  |                               | $ | 26.8  |                                |  |  |                               | $ | (2.1  | )                            |  |  |  | $ | 40.4  |   |  |  |  | $ | 14.0  |   |
| Interest,net                    |  |  |                               |   | 57.8  |                                |  |  |                               |   | 55.6  |                              |  |  |  |   | 114.6 |   |  |  |  |   | 108.4 |   |
| Incometax provision(benefit)    |  |  |                               |   | 17.1  |                                |  |  |                               |   | (0.1  | )                            |  |  |  |   | 28.1  |   |  |  |  |   | 12.9  |   |
| Depreciation                    |  |  |                               |   | 32.3  |                                |  |  |                               |   | 33.5  |                              |  |  |  |   | 64.7  |   |  |  |  |   | 66.7  |   |
| Amortization                    |  |  |                               |   | 17.5  |                                |  |  |                               |   | 20.5  |                              |  |  |  |   | 34.8  |   |  |  |  |   | 41.1  |   |
| EBITDA                          |  |  |                               | $ | 151.5 |                                |  |  |                               | $ | 107.4 |                              |  |  |  | $ | 282.6 |   |  |  |  | $ | 243.1 |   |
| Non-cashcharges(1)              |  |  |                               |   | 6.5   |                                |  |  |                               |   | 5.7   |                              |  |  |  |   | 16.0  |   |  |  |  |   | 15.8  |   |
| Businessoptimizationexpenses(2) |  |  |                               |   | 1.8   |                                |  |  |                               |   | 17.0  |                              |  |  |  |   | 5.6   |   |  |  |  |   | 17.8  |   |
| Unusualitems(3)                 |  |  |                               |   | 2.0   |                                |  |  |                               |   | 1.1   |                              |  |  |  |   | 2.6   |   |  |  |  |   | 1.8   |   |
| Otheradjustments(4)             |  |  |                               |   | (1.7  | )                              |  |  |                               |   | (1.2  | )                            |  |  |  |   | (2.8  | ) |  |  |  |   | (3.0  | ) |
| AdjustedEBITDA                  |  |  |                               | $ | 160.1 |                                |  |  |                               | $ | 130.0 |                              |  |  |  | $ | 304.0 |   |  |  |  | $ | 275.5 |   |
|                                 |

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

|                                                |  |  |                                 |   |      |                                 |  |  |                               |   |      |                              |  |  |  |   |      |  |  |  |  |   |      |  |
|------------------------------------------------|--|--|---------------------------------|---|------|---------------------------------|--|--|-------------------------------|---|------|------------------------------|--|--|--|---|------|--|--|--|--|---|------|--|
| (dollarsin millions)                           |  |  | Three Months endedJune 30, 2006 |   |      | Three Months ended June 30,2005 |  |  | Six Monthsended June 30, 2006 |   |      | SixMonthsended June 30, 2005 |
| Assetwrite-offs                                |  |  |                                 | $ | 0.2  |                                 |  |  |                               | $ | 2.5  |                              |  |  |  | $ | 1.1  |  |  |  |  | $ | 4.9  |  |
| Profitsharing expense and 401(k) funded bySuez |  |  |                                 |   | 6.4  |                                 |  |  |                               |   | 4.2  |                              |  |  |  |   | 11.8 |  |  |  |  |   | 9.8  |  |
| Other                                          |  |  |                                 |   | (0.1 | )                               |  |  |                               |   | (1.0 | )                            |  |  |  |   | 3.1  |  |  |  |  |   | 1.1  |  |
| Non-cashcharges                                |  |  |                                 | $ | 6.5  |                                 |  |  |                               | $ | 5.7  |                              |  |  |  | $ | 16.0 |  |  |  |  | $ | 15.8 |  |
|                                                |

ProfitSharing and 401(k) Expense Funded by Suez

In conjunction withthe Acquisition, we entered into an agreement with Suez whereby Suezwill reimburse us for certain profit-sharing and 401(k) matchingcontributions made by us to the Profit-SharingTrust.

Other

Other non-cash charges include the non-cashimpact on earnings of our equity investments and minority interests.Non-cash charges also includes the non-cash portion of rent expenseunder the sublease that we entered into with Suez in conjunction withthe Acquisition.

|           |                                                                                                                                                       |
|-----------|-------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)  | Business optimizationexpenses include costs associated with the redesign and optimization ofwork processes. See note 7 to Item 1 for moreinformation. |

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

|           |                                                          |
|-----------|----------------------------------------------------------|
| (3)  | Unusual items arefurther detailed on the followingtable: |

|                                     |  |  |                               |   |     |                                |  |  |                               |   |         |                              |  |  |  |   |     |  |  |  |  |   |         |  |
|-------------------------------------|--|--|-------------------------------|---|-----|--------------------------------|--|--|-------------------------------|---|---------|------------------------------|--|--|--|---|-----|--|--|--|--|---|---------|--|
| (dollarsin millions)                |  |  | Three MonthsendedJune 30,2006 |   |     | Three Months ended June30,2005 |  |  | Six Months ended June 30,2006 |   |         | Six Monthsended June 30,2005 |
| Pensionsettlement                   |  |  |                               | $ | 0.1 |                                |  |  |                               | $ | — |                              |  |  |  | $ | 0.4 |  |  |  |  | $ | — |  |
| Loss(gain) on sales, net ofexpenses |  |  |                               |   | 0.5 |                                |  |  |                               |   | 0.6     |                              |  |  |  |   | 0.6 |  |  |  |  |   | 1.1     |  |
| Otherunusual items                  |  |  |                               |   | 1.4 |                                |  |  |                               |   | 0.5     |                              |  |  |  |   | 1.6 |  |  |  |  |   | 0.7     |  |
|                                |  |  |                               | $ | 2.0 |                                |  |  |                               | $ | 1.1     |                              |  |  |  | $ | 2.6 |  |  |  |  | $ | 1.8     |  |
|                                     |

|     |                                                                                                    |
|-----|----------------------------------------------------------------------------------------------------|
| (4) | Weare required to make adjustments to EBITDA for franchise taxes and401(k) matching contributions. |

Our covenant levelsand ratios for the four quarters ended June  30,  2006 areasfollows:

|                                                                                                           |  |  |                               |  |        |        |  |  |  |  |        |  |
|-----------------------------------------------------------------------------------------------------------|--|--|-------------------------------|--|--------|--------|--|--|--|--|--------|--|
|                                                                                                      |  |  | CovenantLevel at June 30,2006 |  |        | Ratios |
| Seniorcreditfacility(1)                                                                                   |  |  |                               |  |   |        |  |  |  |  |   |  |
| MinimumAdjusted EBITDA to cash interestratio                                                              |  |  |                               |  | 1.75x  |        |  |  |  |  | 2.93x  |  |
| Maximumnet debt to Adjusted EBITDAratio                                                                   |  |  |                               |  | 6.00x  |        |  |  |  |  | 4.61x  |  |
| Indentures(2)                                                                                             |  |  |                               |  |   |        |  |  |  |  |   |  |
| MinimumAdjusted EBITDA to fixed charge ratio required to incur additional debtpursuant to ratioprovisions |  |  |                               |  | 2.00x  |        |  |  |  |  | 2.93x  |  |
|                                                                                                           |

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

|  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  | (1) | During2006, our senior credit facility requires us to maintain an AdjustedEBITDA to cash interest ratio at a minimum of 1.75x and a net debt toAdjusted EBITDA ratio at a maximum of 6.00x, 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 abilityto incur additional debt and make certain restricted payments under ourindentures, subject to specified exceptions, is tied to an AdjustedEBITDA to fixed charge ratio of at least 2.0 to 1, except that we mayincur certain debt and make certain restricted payments and certainpermitted investments without regard to the ratio, such as up to anaggregate principal amount of $1,950  million (including$1,149.5  million that was outstanding under our term loanfacilities as of June  30,  2006) and investments insimilar business and other investments equal to 6% of NalcoHoldings LLC consolidated assets. |

Local lines ofcredit.    Certain of our non-U.S. subsidiaries have lines ofcredit to support local requirements. As of June  30,2006, the aggregate outstanding balance under these local lines ofcredit was approximately $26.2  million. Certain of these linesof credit are equally and ratably secured with obligations under oursenior credit facilities.

Receivablesfacility.    Nalco Company entered into a receivables facilityon June  25,  2004 that provides up to $100  millionin funding from a commercial paper conduit sponsored by JPMorgan ChaseBank, one of the lenders under Nalco Company’s senior creditfacilities, based on availability of eligible receivables andsatisfaction of other customary conditions.

Availabilityof funding under the receivables facility depends primarily upon theoutstanding trade accounts receivable balance from time to time.Aggregate availability is determined by using a formula that reducesthe gross receivables balance by factors that take into accounthistorical default and dilution rates, excessive concentrations andaverage days outstanding and the costs of the facility. 

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

Based on the terms of this facility and onthe criteria described above, as of June  30,  2006,approximately $179.0  million of our accounts receivable balancewas considered eligible for financing under the program, of whichapproximately $113.8  million would have been available forfunding. As of June  30,  2006, we had $72.7  millionof outstanding borrowings under this facility.

Thisfacility is treated as a general financing agreement resulting in thefunding and related receivables being shown as liabilities and assets,respectively, on our consolidated balance sheet and the costsassociated with the receivables facility being recorded as interestexpense.

Recent Accounting Pronouncements

See Note14 to the condensed consolidated financial statements, included in PartI, Item 1, for information on recent accountingpronouncements.

|              |                                                           |
|--------------|-----------------------------------------------------------|
| Item3.  | Quantitative and Qualitative Disclosures AboutMarket Risk |

There have been no material changes to theCompany’s exposures to market risk since December31,  2005.

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

|           |                                                  |
|-----------|--------------------------------------------------|
| (a)  | Evaluation of disclosure controlsand procedures. |

The Company’s chief executiveofficer and chief financial officer, after evaluating the effectivenessof the Company’s ‘‘disclosure controls andprocedures’’ (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 effective as of June  30,2006.

|           |                                                       |
|-----------|-------------------------------------------------------|
| (b)  | Changes in internal controls overfinancial reporting. |

There were no changes in theCompany’s internal controls over financial reporting thatoccurred during the second quarter of 2006 that have materiallyaffected, or are reasonably likely to materially affect, theCompany’s internal controls over financialreporting.

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PART II.OTHER INFORMATION 

|               |              |
|---------------|--------------|
| Item1A.  | Risk Factors |

Changes haveoccurred to the following risk factors that were included in theCompany’s Annual Report on Form 10-K for the year endedDecember  31,  2005:

Our pension plans arecurrently underfunded and we may have to make significant cash paymentsto the plans, reducing the cash available for ourbusiness.

We sponsor various pension plans worldwidethat are underfunded and require significant cash payments. Forexample, in 2004 and 2005, we contributed $13.7  million and$30.0  million, respectively, to our pension plans. We arerequired to contribute at least $58.5  million to the U.S.pension plan in 2006. We may also opt to make additional voluntarycontributions to various pension plans worldwide in 2006.

As of December  31,  2005, our worldwide pensionplans were underfunded by $434.2  million (based on the actuarialassumptions used for purposes of Statement of Financial AccountingStandards (SFAS) No. 87, Employers’ Accounting forPensions). Our U.S. pension plans are subject to the EmployeeRetirement Income Security Act of 1974, or ERISA. Under ERISA, thePension Benefit Guaranty Corporation, or PBGC, has the authority toterminate an underfunded pension plan under certain circumstances. Inthe event our U.S. pension plans are terminated for any reason whilethe plans are underfunded, we will incur a liability to the PBGC thatmay be equal to the entire amount of the underfunding. Prior to theclosing of the Acquisition, the PBGC requested and received informationfrom us regarding our business, the Transactions and our pension plans.The PBGC took no further action with respect to theirinquiry.

On August 3, 2006, the U.S. Senate joined theHouse of Representatives in passing pension reform legislation –the Pension Protection Act of 2006 (PPA) (H.R. 4). The PPA will next besent to the President for his approval, and he is expected to sign thebill into law. The proposed legislation affects both defined benefitand defined contribution plans, the employers who sponsor such plans,and plan participants.

We are currently studying the PPAand its impact on our employees and us. However, the new legislationcould influence the amount and timing of our pension fundingrequirements, our decisions regarding pension funding, and the timingof payouts to those of our employees who are plan participants. Anychanges the legislation might have on the terms and conditions of ourpension programs might also impact our employees and influence theiremployment decisions.

Our Sponsors have significantinfluence on us and may have conflicts of interest with us or you inthe future.

As a result of the sale of shares by ourSponsors during the six months ended June  30,  2006, ourSponsors beneficially own approximately 26.7% of the commonstock of our indirect parent company, Nalco Holding Company.

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

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

|  |                    |                                                                                                   |
|--|--------------------|---------------------------------------------------------------------------------------------------|
|  | Exhibit 31.1  | Certification ofChief Executive Officer, Pursuant to Section 302 of the Sarbanes-OxleyAct of 2002 |

|  |                   |                                                                                                   |
|--|-------------------|---------------------------------------------------------------------------------------------------|
|  | Exhibit31.2  | Certification of Chief Financial Officer,Pursuant to Section 302 of the Sarbanes-Oxley Act of2002 |

|  |                    |                                                                                                                       |
|--|--------------------|-----------------------------------------------------------------------------------------------------------------------|
|  | Exhibit 32.1  | CertificationsPursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906of the Sarbanes-Oxley Act of 2002 |

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SIGNATURE

TheCompany has duly caused this report to be signed on its behalf by theundersigned thereunto duly authorized.

|                       |  |  |                                                                                                                                                                                                                                  |
|-----------------------|--|--|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                  |  |  | NALCO HOLDINGS LLC                                                                                                                                                                                                               |
|                  |  |  | /s/BRADLEY J. BELL                                                                                                                                                                                                               |
|                  |  |  | Name:    Bradley J.BellTitle:      Executive Vice Presidentand               Chief FinancialOfficer |
| Dated: August9,  2006 |  |  |                                                                                                                                                                                                                             |
|                       |

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