**UNITED      STATES SECURITIES AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-Q**

**x        QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**

**SECURITIES      EXCHANGE ACT OF 1934**

**o        TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE**

**SECURITIES      EXCHANGE ACT OF 1934**

*Commission      file number 1-8142*

|  **ENGELHARD                CORPORATION**(Exact                name of Registrant as specified in its charter)             |
|---------------------------------------------------------------------------------------------------------------------------------|
|  **DELAWARE**(State                or other jurisdiction ofincorporation                or organization)                   |  **22-1586002**(I.R.S.                Employer Identification No.) |
|  **101                WOOD AVENUE, ISELIN, NEW JERSEY, 08830**(Address                of principal executive offices)      |
|  **(732)                205-5000**(Registrant’s                telephone number, including area                code) |

|  Class                of Common Stock$1                par value  |  Outstanding                at August 1, 2005120,130,297 |
|-----------------------------------------------------------------------------|---------------------------------------------------------------|

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**PART      I - FINANCIAL INFORMATION**

**Item      1.    Financial      Statements**

**ENGELHARD      CORPORATION**

**CONDENSED      CONSOLIDATED STATEMENTS OF EARNINGS**

**(Thousands,      except per-share data)**

**(Unaudited)**

|                                                          |   | **Three                Months Ended****June                30,** |      | **Six                Months Ended****June                30,** |   |
|---------------------------------------------------------------|--------|------------------------------------------------------------------|-----------|----------------------------------------------------------------|--------|
|                                                          |   | **2005**                                                         |      | **2004**                                                       |   | **2005** |   | **2004** |   |
| Net                sales                                      |   | $                                                                | 1,106,025 |                                                           | $      | 1,107,775 |   | $ | 2,132,695 |   | $ | 2,147,807 |   |
| Cost                of sales                                  |   |                                                             | 920,176   |                                                           |   | 938,034 |   |   | 1,778,352 |   |   | 1,818,710 |   |
| Gross                profit                                   |   |                                                             | 185,849   |                                                           |   | 169,741 |   |   | 354,343 |   |   | 329,097 |   |
| Selling,                administrative and other expenses     |   |                                                             | 105,702   |                                                           |   | 96,594 |   |   | 204,770 |   |   | 191,443 |   |
| Special                charge                                 |   |                                                             | 10,362    |                                                           |   | — |   |   | 10,362 |   |   | — |   |
| Operating                earnings                             |   |                                                             | 69,785    |                                                           |   | 73,147 |   |   | 139,211 |   |   | 137,654 |   |
| Equity                in earnings of affiliates               |   |                                                             | 7,432     |                                                           |   | 8,364 |   |   | 15,542 |   |   | 13,303 |   |
| Gain                on investment                             |   |                                                             | 61        |                                                           |   | — |   |   | 180 |   |   | — |   |
| Interest                income                                |   |                                                             | 2,862     |                                                           |   | 1,354 |   |   | 4,938 |   |   | 2,319 |   |
| Interest                expense                               |   |                                                             | (9,408    | )                                                              |   | (5,917 | ) |   | (16,264 | ) |   | (11,788 | ) |
| Earnings                before income taxes                   |   |                                                             | 70,732    |                                                           |   | 76,948 |   |   | 143,607 |   |   | 141,488 |   |
| Income                tax expense                             |   |                                                             | 12,835    |                                                           |   | 8,953 |   |   | 27,757 |   |   | 23,152 |   |
| Net                earnings                                   |   | $                                                                | 57,897    |                                                           | $      | 67,995 |   | $ | 115,850 |   | $ | 118,336 |   |
| Earnings                per share - basic                     |   | $                                                                | 0.48      |                                                           | $      | 0.55 |   | $ | 0.96 |   | $ | 0.96 |   |
| Earnings                per share - diluted                   |   | $                                                                | 0.47      |                                                           | $      | 0.54 |   | $ | 0.94 |   | $ | 0.94 |   |
| Cash                dividends paid per share                  |   | $                                                                | 0.12      |                                                           | $      | 0.11 |   | $ | 0.24 |   | $ | 0.22 |   |
| Average                number of shares outstanding - basic   |   |                                                             | 120,191   |                                                           |   | 123,650 |   |   | 120,943 |   |   | 123,904 |   |
| Average                number of shares outstanding - diluted |   |                                                             | 122,276   |                                                           |   | 126,040 |   |   | 123,064 |   |   | 126,202 |   |

----

**ENGELHARD      CORPORATION**

**CONDENSED      CONSOLIDATED BALANCE SHEETS**

**(Thousands)**

**(Unaudited)**

|                                                            |   | **June                30,****2005** |      | **December                31,****2004** |   |
|-----------------------------------------------------------------|--------|-------------------------------------|-----------|-----------------------------------------|--------|
| Cash                                                            |   | $                                   | 28,261    |                                    | $      | 126,229 |   |
| Receivables,                net                                 |   |                                | 480,549   |                                    |   | 410,382 |   |
| Committed                metal positions                        |   |                                | 488,496   |                                    |   | 457,570 |   |
| Inventories                                                     |   |                                | 490,761   |                                    |   | 459,637 |   |
| Other                current assets                             |   |                                | 122,309   |                                    |   | 135,631 |   |
| Total                current assets                             |   |                                | 1,610,376 |                                    |   | 1,589,449 |   |
| Investments                                                     |   |                                | 197,346   |                                    |   | 179,160 |   |
| Property,                plant and equipment, net               |   |                                | 896,760   |                                    |   | 911,029 |   |
| Goodwill                                                        |   |                                | 384,506   |                                    |   | 330,798 |   |
| Other                intangible and noncurrent assets           |   |                                | 154,987   |                                    |   | 168,156 |   |
| Total                assets                                     |   | $                                   | 3,243,975 |                                    | $      | 3,178,592 |   |
|  Short-term                borrowings                      |   | $                                   | 38,490    |                                    | $      | 12,025 |   |
| Accounts                payable                                 |   |                                | 337,594   |                                    |   | 375,890 |   |
| Hedged                metal obligations                         |   |                                | 401,873   |                                    |   | 292,880 |   |
| Other                current liabilities                        |   |                                | 267,198   |                                    |   | 248,872 |   |
| Total                current liabilities                        |   |                                | 1,045,155 |                                    |   | 929,667 |   |
| Long-term                debt                                   |   |                                | 496,025   |                                    |   | 513,680 |   |
| Other                noncurrent liabilities                     |   |                                | 305,805   |                                    |   | 320,933 |   |
| Shareholders’                equity                       |   |                                | 1,396,990 |                                    |   | 1,414,312 |   |
| Total                liabilities and shareholders’ equity |   | $                                   | 3,243,975 |                                    | $      | 3,178,592 |   |

----

**ENGELHARD      CORPORATION**

**CONDENSED      CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Thousands)**

**(Unaudited)**

|                                                                                                                                 |   | **Six                Months Ended****June                30,** |     |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------|----------|
|                                                                                                                                 |   | **2005**                                                       |     | **2004** |   |
| Cash                flows from operating activities                                                                                  |   |                                                           |     |   |   |   |   |
| Net                earnings                                                                                                          |   | $                                                              | 115,850  |   | $ | 118,336 |   |
|                    Adjustments to reconcile net earnings to net cash provided by operating                activities: |   |                                                           |     |   |   |   |   |
| Depreciation                and depletion                                                                                            |   |                                                           | 62,914   |   |   | 62,113 |   |
| Amortization                of intangible assets                                                                                     |   |                                                           | 2,416    |   |   | 1,845 |   |
| Equity                results, net of dividends                                                                                      |   |                                                           | (6,659   | ) |   | (3,356 | ) |
| Net                change in assets and liabilities:                                                                                 |   |                                                           |     |   |   |   |   |
| Materials                Services related                                                                                            |   |                                                           | 3,815    |   |   | 21,173 |   |
| All                other                                                                                                             |   |                                                           | (38,387  | ) |   | (30,502 | ) |
| Net                cash provided by operating activities                                                                             |   |                                                           | 139,949  |   |   | 169,609 |   |
| Cash                flows from investing activities                                                                                  |   |                                                           |     |   |   |   |   |
| Capital                expenditures                                                                                                  |   |                                                           | (53,599  | ) |   | (44,591 | ) |
| Proceeds                from investments                                                                                             |   |                                                           | —  |   |   | 1,988 |   |
| Acquisitions                and other investments, net of cash acquired of $16,023                                                   |   |                                                           | (93,828  | ) |   | (6,240 | ) |
| Net                cash used in investing activities                                                                                 |   |                                                           | (147,427 | ) |   | (48,843 | ) |
| Cash                flows from financing activities                                                                                  |   |                                                           |     |   |   |   |   |
| Increase                (decrease) in short-term borrowings                                                                          |   |                                                           | 5,948    |   |   | (58,574 | ) |
| Proceeds                from long-term debt                                                                                          |   |                                                           | 66       |   |   | 51,136 |   |
| Purchase                of treasury stock                                                                                            |   |                                                           | (82,895  | ) |   | (51,123 | ) |
| Cash                from exercise of stock options                                                                                   |   |                                                           | 6,275    |   |   | 19,200 |   |
| Dividends                paid                                                                                                        |   |                                                           | (29,056  | ) |   | (27,335 | ) |
| Net                cash used in financing activities                                                                                 |   |                                                           | (99,662  | ) |   | (66,696 | ) |
| Effect                of exchange rate changes on cash                                                                               |   |                                                           | 9,172    |   |   | (1,361 | ) |
| Net                (decrease) increase in cash                                                                                       |   |                                                           | (97,968  | ) |   | 52,709 |   |
| Cash                at beginning of year                                                                                             |   |                                                           | 126,229  |   |   | 87,889 |   |
| Cash                at end of period                                                                                                 |   | $                                                              | 28,261   |   | $ | 140,598 |   |

----

**ENGELHARD      CORPORATION**

**BUSINESS      SEGMENT INFORMATION**

**(Thousands)**

**(Unaudited)**

|                                                   |   | **Three                Months Ended****June                30,** |      | **Six                Months Ended****June                30,** |   |
|--------------------------------------------------------|--------|------------------------------------------------------------------|-----------|----------------------------------------------------------------|--------|
|                                                   |   | **2005**                                                         |      | **2004**                                                       |   | **2005** |   | **2004** |   |
| Net                Sales                               |   |                                                             |      |                                                           |   |   |   |   |   |   |   |   |   |
| Environmental                Technologies              |   | $                                                                | 250,534   |                                                           | $      | 224,209 |   | $ | 491,895 |   | $ | 462,646 |   |
| Process                Technologies                    |   |                                                             | 172,559   |                                                           |   | 159,214 |   |   | 320,540 |   |   | 291,434 |   |
| Appearance                and Performance Technologies |   |                                                             | 186,594   |                                                           |   | 185,238 |   |   | 360,469 |   |   | 351,531 |   |
| Technology                segments                     |   |                                                             | 609,687   |                                                           |   | 568,661 |   |   | 1,172,904 |   |   | 1,105,611 |   |
| Materials                Services                      |   |                                                             | 480,202   |                                                           |   | 525,153 |   |   | 930,683 |   |   | 1,016,252 |   |
| All                Other                               |   |                                                             | 16,136    |                                                           |   | 13,961 |   |   | 29,108 |   |   | 25,944 |   |
| Total                net sales                         |   | $                                                                | 1,106,025 |                                                           | $      | 1,107,775 |   | $ | 2,132,695 |   | $ | 2,147,807 |   |
| Operating                Earnings                      |   |                                                             |      |                                                           |   |   |   |   |   |   |   |   |   |
| Environmental                Technologies              |   | $                                                                | 28,034    |                                                           | $      | 32,755 |   | $ | 64,534 |   | $ | 69,744 |   |
| Process                Technologies                    |   |                                                             | 23,306    |                                                           |   | 23,066 |   |   | 42,363 |   |   | 39,362 |   |
| Appearance                and Performance Technologies |   |                                                             | 20,484    |                                                           |   | 23,806 |   |   | 38,548 |   |   | 38,857 |   |
| Technology                segments                     |   |                                                             | 71,824    |                                                           |   | 79,627 |   |   | 145,445 |   |   | 147,963 |   |
| Materials                Services                      |   |                                                             | 5,891     |                                                           |   | 2,754 |   |   | 10,284 |   |   | 6,122 |   |
| All                Other                               |   |                                                             | (7,930    | )                                                              |   | (9,234 | ) |   | (16,518 | ) |   | (16,431 | ) |
| Total                operating earnings                |   |                                                             | 69,785    |                                                           |   | 73,147 |   |   | 139,211 |   |   | 137,654 |   |
| Equity                in earnings of affiliates        |   |                                                             | 7,432     |                                                           |   | 8,364 |   |   | 15,542 |   |   | 13,303 |   |
| Gain                on investment                      |   |                                                             | 61        |                                                           |   | — |   |   | 180 |   |   | — |   |
| Interest                income                         |   |                                                             | 2,862     |                                                           |   | 1,354 |   |   | 4,938 |   |   | 2,319 |   |
| Interest                expense                        |   |                                                             | (9,408    | )                                                              |   | (5,917 | ) |   | (16,264 | ) |   | (11,788 | ) |
| Earnings                before income taxes            |   |                                                             | 70,732    |                                                           |   | 76,948 |   |   | 143,607 |   |   | 141,488 |   |
| Income                tax expense                      |   |                                                             | 12,835    |                                                           |   | 8,953 |   |   | 27,757 |   |   | 23,152 |   |
| Net                earnings                            |   | $                                                                | 57,897    |                                                           | $      | 67,995 |   | $ | 115,850 |   | $ | 118,336 |   |

----

**Notes      to the Unaudited Condensed Consolidated Financial      Statements**

**Note        1 - Basis of Presentation**

**Note        2 - Special Charges**

**Note        3 - Acquisitions**

----

**Note        **
**4        - Accounting for Asset Retirement Obligations**

|                                                          |   | **June                  30, 2005** |   | **June                  30, 2004** |   |
|---------------------------------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|
| Balance                  at beginning of year                 |   | $                                  | 10.8   |                               | $      | 10.5 |   |
| Accretion                  expense                            |   |                               | 0.3    |                               |   | 0.3 |   |
| Payments                                                      |   |                               | (0.5   | )                                  |   | (0.6 | ) |
| Asset                  retirement obligation at end of period |   | $                                  | 10.6   |                               | $      | 10.2 |   |

**Note        5 - Inventories**

|                               |   | **June                  30, 2005** |   | **December                  31, 2004** |   |
|------------------------------------|--------|------------------------------------|--------|----------------------------------------|--------|
| Raw                  materials     |   | $                                  | 165.3  |                                   | $      | 137.5 |   |
| Work                  in process   |   |                               | 51.2   |                                   |   | 49.3 |   |
| Finished                  goods    |   |                               | 257.9  |                                   |   | 255.1 |   |
| Precious                  metals   |   |                               | 16.4   |                                   |   | 17.7 |   |
| Total                  inventories |   | $                                  | 490.8  |                                   | $      | 459.6 |   |

----

**Note        6 - Comprehensive Income**

|                                                              |   | **Three                  Months Ended****June                  30,** |    | **Six                  Months Ended****June                  30,** |   |
|-------------------------------------------------------------------|--------|----------------------------------------------------------------------|---------|--------------------------------------------------------------------|--------|
|                                                              |   | **2005**                                                             |    | **2004**                                                           |   | **2005** |   | **2004** |   |
| Net                  earnings                                     |   | $                                                                    | 57.9    |                                                               | $      | 68.0 |   | $ | 115.9 |   | $ | 118.3 |   |
| Other                  comprehensive income (loss):               |   |                                                                 |    |                                                               |   |   |   |   |   |   |   |   |   |
| Foreign                  currency translation adjustment          |   |                                                                 | (40.4   | )                                                                  |   | 0.1 |   |   | (41.8 | ) |   | 0.6 |   |
| Cash                  flow derivative adjustment, net of tax      |   |                                                                 | (1.9    | )                                                                  |   | (0.2 | ) |   | 6.6 |   |   | 1.2 |   |
| Investment                  adjustment, net of tax                |   |                                                                 | — |                                                               |   | (0.1 | ) |   | — |   |   | (0.4 | ) |
| Minimum                  pension liability adjustment, net of tax |   |                                                                 | 0.4     |                                                               |   | — |   |   | 0.6 |   |   | — |   |
| Comprehensive                  income                             |   | $                                                                    | 16.0    |                                                               | $      | 67.8 |   | $ | 81.3 |   | $ | 119.7 |   |

**Note        7 - Earnings Per Share**

|                                                                   |   | **Three                  Months Ended****June                  30,** |   | **Six                  Months Ended****June                  30,** |   |
|------------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|
| (in                  millions, except per-share data):                 |   | **2005**                                                             |   | **2004**                                                           |   | **2005** |   | **2004** |   |
| Basic                  EPS Computation                                 |   |                                                                 |   |                                                               |   |   |   |   |   |   |   |   |   |
| Net                  earnings applicable to common shares              |   | $                                                                    | 57.9   |                                                               | $      | 68.0 |   | $ | 115.9 |   | $ | 118.3 |   |
| Average                  number of shares outstanding - basic          |   |                                                                 | 120.2  |                                                               |   | 123.7 |   |   | 120.9 |   |   | 123.9 |   |
| Basic                  earnings per share                              |   | $                                                                    | 0.48   |                                                               | $      | 0.55 |   | $ | 0.96 |   | $ | 0.96 |   |
| Diluted                  EPS Computation                               |   |                                                                 |   |                                                               |   |   |   |   |   |   |   |   |   |
| Net                  earnings applicable to common shares              |   | $                                                                    | 57.9   |                                                               | $      | 68.0 |   | $ | 115.9 |   | $ | 118.3 |   |
| Average                  number of shares outstanding - basic          |   |                                                                 | 120.2  |                                                               |   | 123.7 |   |   | 120.9 |   |   | 123.9 |   |
| Effect                  of dilutive stock options and other incentives |   |                                                                 | 2.1    |                                                               |   | 2.3 |   |   | 2.2 |   |   | 2.3 |   |
| Average                  number of shares outstanding - diluted        |   |                                                                 | 122.3  |                                                               |   | 126.0 |   |   | 123.1 |   |   | 126.2 |   |
| Diluted                  earnings per share                            |   | $                                                                    | 0.47   |                                                               | $      | 0.54 |   | $ | 0.94 |   | $ | 0.94 |   |

**Note        8 - Derivatives and Hedging**

----

----

**Note        9 - Guarantees and Warranties**

----

|                                          |   | **June                  30, 2005** |   | **June                  30, 2004** |   |
|-----------------------------------------------|--------|------------------------------------|--------|------------------------------------|--------|
| Balance                  at beginning of year |   | $                                  | 8.7    |                               | $      | 10.0 |   |
| Payments                                      |   |                               | (1.7   | )                                  |   | (2.7 | ) |
| Provision                                     |   |                               | 0.1    |                               |   | 3.2 |   |
| Reversal                  of reserve (a)      |   |                               | (1.3   | )                                  |   | — |   |
| Balance                  at end of period     |   | $                                  | 5.8    |                               | $      | 10.5 |   |

| (a)   | In                  2005, the Company reversed a $1.3 million warranty accrual ($0.8                  million                  due to favorable experience related to the Environmental Technologies                  segment and $0.5 million due to expiration of                  warranties). |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Note        10 - Goodwill and Other Intangible Assets**

|                                                    |   | **As                  of June 30, 2005**      |   | **As                  of December 31, 2004** |   |
|---------------------------------------------------------|--------|-----------------------------------------------|--------|----------------------------------------------|--------|
|                                                    |   | **Gross                  Carrying****Amount** |   | **Accumulated****Amortization**              |   | **Gross                  Carrying****Amount** |   | **Accumulated****Amortization** |   |
| Acquired                  Amortizable Intangible Assets |   |                                          |   |                                         |   |   |   |   |   |   |   |   |   |
| Usage                  rights                           |   | $                                             | 19.9   |                                         | $      | 6.3 |   | $ | 22.2 |   | $ | 6.3 |   |
| Supply                  agreements                      |   |                                          | 17.3   |                                         |   | 6.4 |   |   | 19.0 |   |   | 6.3 |   |
| Technology                  licenses                    |   |                                          | 16.1   |                                         |   | 4.2 |   |   | 9.1 |   |   | 3.5 |   |
| Other                                                   |   |                                          | 5.6    |                                         |   | 3.2 |   |   | 3.7 |   |   | 2.3 |   |
| Total                                                   |   | $                                             | 58.9   |                                         | $      | 20.1 |   | $ | 54.0 |   | $ | 18.4 |   |

| Estimated                  Annual Amortization Expense: |   |   |   |
|---------------------------------------------------------|--------|--------|--------|
| 2005                                                    |   | $      | 4.5    |   |
| 2006                                                    |   |   | 4.4    |   |
| 2007                                                    |   |   | 4.3    |   |
| 2008                                                    |   |   | 4.3    |   |
| 2009                                                    |   |   | 4.2    |   |

----

|                                                     |   | **Environmental                  Technologies** |    | **Process                  Technologies** |   | **Appearance                  & Performance Technologies** |   | **All                  Other** |    | **Total** |   |
|----------------------------------------------------------|--------|-------------------------------------------------|---------|-------------------------------------------|--------|----------------------------------------------------------------|--------|--------------------------------|---------|-----------|--------|
| Balance                  as of January 1, 2005           |   | $                                               | 20.4    |                                      | $      | 108.1                                                          |   | $                              | 201.8   |      | $      | 0.5 |   | $ | 330.8 |   |
| Goodwill                  additions (a)                  |   |                                            | — |                                      |   | 1.5                                                            |   |                           | 63.8    |      |   | — |   |   | 65.3 |   |
| Purchase                  accounting adjustments (b)     |   |                                            | — |                                      |   | —                                                        |   |                           | (4.5    | )         |   | — |   |   | (4.5 | ) |
| Foreign                  currency translation adjustment |   |                                            | (1.4    | )                                         |   | —                                                        |   |                           | (4.4    | )         |   | — |   |   | (5.8 | ) |
| Goodwill                  impairment (c)                 |   |                                            | (1.3    | )                                         |   | —                                                        |   |                           | — |      |   | — |   |   | (1.3 | ) |
| Balance                  as of June 30, 2005             |   | $                                               | 17.7    |                                      | $      | 109.6                                                          |   | $                              | 256.7   |      | $      | 0.5 |   | $ | 384.5 |   |

| (a)   | Goodwill                  additions amount includes $63.8 million related to the Company’s                  acquisition of Coletica, S.A. during the first quarter of 2005                  and $1.5                  million related to the acquisition of the catalyst business of                  Nanjing                  Chemical Industry Corporation during the second quarter of 2005.                  These                  amounts represent the excess of the purchase price paid over the                  fair                  market value of the net assets acquired. The Company is completing                  its                  review and determination of these fair values, and thus the allocation                  of                  the purchase price is subject to                  revision. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Purchase                  accounting adjustment of $4.5 million relates to a revision of                  the                  allocation of the purchase price of The Collaborative Group, Ltd.,                  including its wholly owned subsidiary Collaborative Laboratories,                  Inc.,                  acquired by the Company in the third quarter of 2004, in accordance                  with                  SFAS No. 141, “Business                  Combinations.” |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Goodwill                  impairment charge of $1.3 million was recorded by the Company in                  the                  second quarter of 2005, in accordance with SFAS No. 142, “Goodwill and                  Other Intangible Assets,” related to the Company’s plan to discontinue                  manufacturing operations at its Carteret, New Jersey                  facility. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Note        11 - Committed Metal Positions and Hedged Metal        Obligations**

|                                                                                                                                    |   | **June                  30, 2005** |   | **December                  31, 2004** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|--------|----------------------------------------|--------|
| Committed                  Metal Positions were comprised of the following (in                  millions):                              |   |                               |   |                                   |   |
| Metals                  in a net spot long position economically hedged with derivatives                  (primarily forward sales)     |   | $                                  | 446.9  |                                   | $      | 324.2 |   |
| Fair                  value of hedging derivatives in a “gain” position                                                     |   |                               | 9.9    |                                   |   | 14.2 |   |
| Unhedged                  metal positions, net (see analysis below)                                                                     |   |                               | 23.8   |                                   |   | 19.3 |   |
| Fair                  value of metals received with prices to be determined, net of hedged                  spot                  sales |   |                               | 7.9    |                                   |   | 99.9 |   |
| Total                  committed metal positions                                                                                        |   | $                                  | 488.5  |                                   | $      | 457.6 |   |

----

|                                            |   | **June                  30, 2005** |   | **December                  31, 2004** |   |
|-------------------------------------------------|--------|------------------------------------|--------|----------------------------------------|--------|
|                                            |   | **Net****Position**                |   | **Value**                              |   | **Net****Position** |   | **Value** |   |
| Platinum                  group metals          |   |                               | Long   |                                   | $      | 27.9 |   |   | Long |   | $ | 19.4 |   |
| Gold                                            |   |                               | Short  |                                   |   | (2.2 | ) |   | Flat |   |   | — |   |
| Silver                                          |   |                               | Flat   |                                   |   | — |   |   | Short |   |   | (0.9 | ) |
| Base                  metals                    |   |                               | Short  |                                   |   | (1.9 | ) |   | Long |   |   | 0.8 |   |
| Total                  unhedged metal positions |   |                               |   |                                   | $      | 23.8 |   |   |   |   | $ | 19.3 |   |

|                                                                                                                                                                                                                                             |   | **June                  30, 2005** |   | **December                  31, 2004** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|--------|----------------------------------------|--------|
| Hedged                  Metal Obligations were comprised of the following (in                  millions):                                                                                                                                        |   |                               |   |                                   |   |   |   |
| Metals                  in a net spot short position economically hedged with derivatives                  (primarily forward purchases) - represents a payable for the return                  of                  spot metal to counterparties |   | $                                  | 378.8  |                                   | $      | 265.1 |   |
| Fair                  value of hedging derivatives in a “loss” position                                                                                                                                                              |   |                               | 23.1   |                                   |   | 27.8 |   |
| Total                  hedged metal obligations                                                                                                                                                                                                  |   | $                                  | 401.9  |                                   | $      | 292.9 |   |

|                                                              |   | **June                  30, 2005** |    | **December                  31, 2004** |   |
|-------------------------------------------------------------------|--------|------------------------------------|---------|----------------------------------------|--------|
|                                                              |   | **Buy**                            |    | **Sell**                               |   | **Buy** |   | **Sell** |   |
| Metal                  forwards/futures                           |   | $                                  | 697.7   |                                   | $      | 645.9 |   | $ | 625.2 |   | $ | 662.6 |   |
| Eurodollar                  futures                               |   |                               | 72.8    |                                   |   | 52.0 |   |   | 11.2 |   |   | 136.6 |   |
| Swaps                                                             |   |                               | 38.0    |                                   |   | 6.5 |   |   | 31.2 |   |   | 9.8 |   |
| Options                                                           |   |                               | 22.9    |                                   |   | — |   |   | 3.9 |   |   | — |   |
| Foreign                  exchange forwards/futures - Japanese yen |   |                               | — |                                   |   | 81.8 |   |   | — |   |   | 130.8 |   |
| Foreign                  exchange forwards/futures - Euro         |   |                               | — |                                   |   | 23.4 |   |   | — |   |   | 23.4 |   |
| Foreign                  exchange forwards/futures - Other        |   |                               | 3.5     |                                   |   | — |   |   | 5.5 |   |   | — |   |

----

**Note        12 - New Accounting Pronouncements**

**Note        13 - Stock Option and Bonus Plans**

----

| Pro                  Forma Information                                                                                                                                         |   | **Three                  Months Ended****June                  30,** |   | **Six                  Months Ended****June                  30,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|--------------------------------------------------------------------|--------|
| (in                  millions, except per share-data):                                                                                                                         |   | **2005**                                                             |   | **2004**                                                           |   | **2005** |   | **2004** |   |
| Net                  earnings - as reported                                                                                                                                    |   | $                                                                    | 57.9   |                                                               | $      | 68.0 |   | $ | 115.9 |   | $ | 118.3 |   |
| Deduct:                  Total stock-based employee compensation expense determined under                  fair                  value based method for all awards, net of tax |   |                                                                 | (0.8   | )                                                                  |   | (0.8 | ) |   | (3.1 | ) |   | (3.6 | ) |
| Net                  earnings - pro forma                                                                                                                                      |   | $                                                                    | 57.1   |                                                               | $      | 67.2 |   | $ | 112.8 |   | $ | 114.7 |   |

| Earnings                  Per Share:                      |   |   |   |   |   |   |   |   |   |
|-----------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Basic                  earnings per share - as reported   |   | $      | 0.48   |   | $      | 0.55   |   | $      | 0.96   |   | $ | 0.96 |   |
| Basic                  earnings per share - pro forma     |   |   | 0.48   |   |   | 0.54   |   |   | 0.93   |   |   | 0.93 |   |
| Diluted                  earnings per share - as reported |   |   | 0.47   |   |   | 0.54   |   |   | 0.94   |   |   | 0.94 |   |
| Diluted                  earnings per share - pro forma   |   |   | 0.47   |   |   | 0.53   |   |   | 0.92   |   |   | 0.91 |   |

**Note        14 - Benefits**

|                                                |   | **Pension                  Benefits** |   | **Other                  Benefits** |   |
|-----------------------------------------------------|--------|---------------------------------------|--------|-------------------------------------|--------|
|                                                |   | **2005**                              |   | **2004**                            |   | **2005** |   | **2004** |   |
| Service                  cost                       |   | $                                     | 12.0   |                                | $      | 11.1 |   | $ | 2.1 |   | $ | 1.9 |   |
| Interest                  cost                      |   |                                  | 20.3   |                                |   | 19.0 |   |   | 3.9 |   |   | 4.4 |   |
| Expected                  return on plan assets     |   |                                  | (24.5  | )                                   |   | (24.1 | ) |   | — |   |   | — |   |
| Amortization                  of prior service cost |   |                                  | 1.2    |                                |   | 1.6 |   |   | (1.1 | ) |   | (1.1 | ) |
| Recognized                  actuarial loss          |   |                                  | 7.2    |                                |   | 5.4 |   |   | 0.5 |   |   | 0.7 |   |
| Net                  periodic benefit cost          |   | $                                     | 16.2   |                                | $      | 13.0 |   | $ | 5.4 |   | $ | 5.9 |   |

----

| Year                                               |   |   |   |
|----------------------------------------------------|--------|--------|--------|
| 2005                  (July 1 through December 31) |   | $      | 5.9    |   |
| 2006                                               |   |   | 11.2   |   |
| 2007                                               |   |   | 10.6   |   |
| 2008                                               |   |   | 10.0   |   |
| 2009                                               |   |   | 9.4    |   |
| 2010                  through 2014                 |   |   | 44.0   |   |

| Year                                               |   |   |   |
|----------------------------------------------------|--------|--------|--------|
| 2005                  (July 1 through December 31) |   | $      | -      |   |
| 2006                                               |   |   | 1.7    |   |
| 2007                                               |   |   | 1.9    |   |
| 2008                                               |   |   | 1.9    |   |
| 2009                                               |   |   | 2.0    |   |
| 2010                  through 2014                 |   |   | 8.3    |   |

----

**Note        15 **
**-        Supplemental Information**

|                                                                   |   | **Six                  Months Ended June 30,** |   |
|------------------------------------------------------------------------|--------|------------------------------------------------|--------|
|                                                                   |   | **2005**                                       |   | **2004** |   |
| Materials                  Services related:                           |   |                                           |   |   |   |
| Change                  in assets and liabilities - source (use):      |   |                                           |   |   |   |   |   |
| Receivables                                                            |   | $                                              | (4.1   | ) | $ | (10.8 | ) |
| Committed                  metal positions                             |   |                                           | (78.0  | ) |   | (65.4 | ) |
| Inventories                                                            |   |                                           | 0.6    |   |   | - |   |
| Other                  current assets                                  |   |                                           | (1.1   | ) |   | 0.4 |   |
| Accounts                  payable                                      |   |                                           | (28.5  | ) |   | 104.5 |   |
| Hedged                  metal obligations                              |   |                                           | 113.8  |   |   | (3.8 | ) |
| Other                  current liabilities                             |   |                                           | 1.1    |   |   | (3.7 | ) |
| Net                  cash flows from changes in assets and liabilities |   | $                                              | 3.8    |   | $ | 21.2 |   |

| All                    Other:                                            |   |   |   |   |   |
|--------------------------------------------------------------------------|--------|--------|--------|--------|--------|
| Change                    in assets and liabilities - source (use):      |   |   |   |   |   |   |   |
| Receivables                                                              |   | $      | (74.8  | )      | $      | (23.9 | ) |
| Inventories                                                              |   |   | (40.0  | )      |   | (2.5 | ) |
| Other                    current assets                                  |   |   | 14.3   |   |   | 1.8 |   |
| Other                    noncurrent assets                               |   |   | 13.8   |   |   | 5.5 |   |
| Accounts                    payable                                      |   |   | 31.7   |   |   | 0.4 |   |
| Other                    current liabilities                             |   |   | 41.8   |   |   | (9.5 | ) |
| Noncurrent                    liabilities                                |   |   | (25.2  | )      |   | (2.3 | ) |
| Net                    cash flows from changes in assets and liabilities |   | $      | (38.4  | )      | $      | (30.5 | ) |

**Note        16 - Other Matters**

----

**Note        17**
**        - Income Taxes**

----

**Item          2.**
**Management’s          Discussion and Analysis of Financial Condition and Results of          Operations**

**Overview**

**Results          of Operations**

**Comparison          of the Second Quarter of 2005 with the Second Quarter of          2004**

----

**Environmental          Technologies**

**Results          of Operations**
*(in          millions)*

|                                                       |   | **Q2                    2005** |   | **Q2                    2004** |   | **%                    change** |   |
|------------------------------------------------------------|--------|--------------------------------|--------|--------------------------------|--------|---------------------------------|--------|
| Sales                                                      |   | $                              | 250.5  |                           | $      | 224.2                           |   |   |  11.7% |   |
| Operating                    earnings before special items |   |                           | 38.4   |                           |   | 32.8                            |   |   |  17.1% |   |
| Special                    charge                          |   |                           | 10.4   |                           |   | 0.0                             |   |   |   |   |
| Operating                    earnings                      |   |                           | 28.0   |                           |   | 32.8                            |   |   | -14.6% |   |

----

*Discussion*

**Process          Technologies**

**Results          of Operations **
*(in          millions)*

|                                  |   | **Q2                    2005** |   | **Q2                    2004** |   | **%                    change** |   |
|---------------------------------------|--------|--------------------------------|--------|--------------------------------|--------|---------------------------------|--------|
| Sales                                 |   | $                              | 172.6  |                           | $      | 159.2                           |   |   | 8.4% |   |
| Operating                    earnings |   |                           | 23.3   |                           |   | 23.1                            |   |   | 0.9% |   |

----

*Discussion*

*Lynx          1000*

**Appearance          and Performance Technologies**

**Results          of Operations **
*(in          millions)*

|                                  |   | **Q2                    2005** |   | **Q2                    2004** |   | **%                    change** |   |
|---------------------------------------|--------|--------------------------------|--------|--------------------------------|--------|---------------------------------|--------|
| Sales                                 |   | $                              | 186.6  |                           | $      | 185.2                           |   |   |                      0.8% |   |
| Operating                    earnings |   |                           | 20.5   |                           |   | 23.8                            |   |   | -13.9% |   |

----

*Discussion*

**Materials          Services**

**Results          of Operations **
*(in          millions)*

|                                  |   | **Q2                    2005** |   | **Q2                    2004** |   | **%                    change** |   |
|---------------------------------------|--------|--------------------------------|--------|--------------------------------|--------|---------------------------------|--------|
| Sales                                 |   | $                              | 480.2  |                           | $      | 525.2                           |   |   |                      -8.6% |   |
| Operating                    earnings |   |                           | 5.9    |                           |   | 2.8                             |   |   | 110.7% |   |

----

*Discussion*

*e.g.*

**Comparison          of the First Half of 2005 with the First Half of 2004**

**Environmental          Technologies**

**Results          of Operations**
*(in          millions)*

|                                                       |   | **First                    Half 2005** |   | **First                    Half 2004** |   | **%                    change** |   |
|------------------------------------------------------------|--------|----------------------------------------|--------|----------------------------------------|--------|---------------------------------|--------|
| Sales                                                      |   | $                                      | 491.9  |                                   | $      | 462.6                           |   |   |                      6.3% |   |
| Operating                    earnings before special items |   |                                   | 74.9   |                                   |   | 69.7                            |   |   |                      7.5% |   |
| Special                    Charge                          |   |                                   | 10.4   |                                   |   | 0.0                             |   |   |   |   |
| Operating                    earnings                      |   |                                   | 64.5   |                                   |   | 69.7                            |   |   | -7.5% |   |

*Discussion*

----

**Process          Technologies**

**Results          of Operations **
*(in          millions)*

|                                  |   | **First                    Half 2005** |   | **First                    Half 2004** |   | **%                    change** |   |
|---------------------------------------|--------|----------------------------------------|--------|----------------------------------------|--------|---------------------------------|--------|
| Sales                                 |   | $                                      | 320.5  |                                   | $      | 291.4                           |   |   | 10.0% |   |
| Operating                    earnings |   |                                   | 42.4   |                                   |   | 39.4                            |   |   |                      7.6% |   |

*Discussion*

**Appearance          and Performance Technologies**

**Results          of Operations **
*(in          millions)*

|                                  |   | **First                    Half 2005** |   | **First                    Half 2004** |   | **%                    change** |   |
|---------------------------------------|--------|----------------------------------------|--------|----------------------------------------|--------|---------------------------------|--------|
| Sales                                 |   | $                                      | 360.5  |                                   | $      | 351.5                           |   |   |  2.6% |   |
| Operating                    earnings |   |                                   | 38.5   |                                   |   | 38.9                            |   |   | -1.0% |   |

*Discussion*

----

**Materials          Services**

**Results          of Operations **
*(in          millions)*

|                                  |   | **First                    Half 2005** |   | **First                    Half 2004** |   | **%                    change** |   |
|---------------------------------------|--------|----------------------------------------|--------|----------------------------------------|--------|---------------------------------|--------|
| Sales                                 |   | $                                      | 930.7  |                                   | $      | 1,016.3                         |   |   | -8.4% |   |
| Operating                    earnings |   |                                   | 10.3   |                                   |   | 6.1                             |   |   | 68.9% |   |

*Discussion*

**Liquidity          and Capital Resources**

**Liquidity**

----

**Capital          Resources**

----

**Forward-Looking          Statements**

| ·   | *The                    Company’s ability to achieve and execute internal business                    plans*.                    The Company is currently engaged in formal productivity improvement                    plans                    in its Appearance and Performance Technologies and Environmental                    Technologies segments that are expected to have a positive impact                    on                    earnings. Failure to achieve certain milestones would negatively                    impact                    the Company. The Company is also engaged in growth initiatives                    in all                    technology segments, led by the Strategic Technologies group.                    Failure to                    commercialize proprietary and other technologies or to acquire                    businesses                    or licensing agreements to serve targeted markets would negatively                    impact                    the Company. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Future                    divestitures and restructurings.*                    The Company may experience changes in market conditions that                    cause the                    Company to consider divesting or restructuring operations, which                    could                    impact future earnings. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *The                    success of research and development activities and the speed                    with which                    regulatory authorizations and product launches may be                    achieved.*                    The Company’s future cash flows depend upon the creation, acquisition and                    commercialization of new                    technologies. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Manufacturing                    difficulties, property loss, or casualty loss.*                    Although the Company maintains business interruption insurance,                    the                    Company is dependent upon the operating success of its manufacturing                    facilities, and does not maintain redundant capacity. Failure                    of these                    manufacturing facilities would cause short-term profitability                    losses and                    could damage customer relations in the                    long-term. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Capacity                    constraints.*Some                    of the Company’s businesses operate near current capacity levels. Should                    demand for certain products increase, the Company would experience                    short-term difficulty meeting the increased demand, hindering                    growth                    opportunities. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | *Product                    quality deficiencies.*The                    Company’s products are generally sold based upon specifications agreed                    upon with our customers. Failure to meet these specifications                    could                    negatively impact the Company. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *The                    impact of physical inventory losses, particularly with regard                    to precious                    and base metals.*                    Although the Company maintains property and casualty insurance,                    the                    Company holds large physical quantities of precious and base                    metals, often                    for the account of third parties. These quantities are subject                    to loss by                    theft and manufacturing                    inefficiency. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Litigation                    and legal claims.*The                    Company is currently engaged in various legal disputes. Unfavorable                    resolution of these disputes would negatively impact the Company.                    Still                    unidentified future legal claims could also negatively impact                    the                    Company. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | *Contingencies                    related to actual or alleged environmental contamination to which                    the                    Company may be a party*(see                    Note 21, “Environmental Costs,” of the Company’s 2004 Form 10-K, as well                    as the section above). |
|----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| *·  * | *Exposure                    to product liability lawsuits.* |
|----------------------|--------------------------------------------------------------|

| ·   | *Competitive                    pricing or product development activities affecting demand for                    our                    products.*                    The Company operates in a number of markets where overcapacity,                    low priced                    foreign competitors, and other factors create a situation where                    competitors compete for business by reducing their prices, notably                    the                    kaolin to paper market, some effect pigments markets, the colorant                    market,                    certain chemical process markets and certain components of the                    mobile-source environmental markets. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Overall                    demand for the Company’s products, which is dependent on the demand for                    our customers’ products.*                    As                    a supplier of materials to other manufacturers, the Company is                    dependent                    upon the markets for its customers’ products. Notably, some North American                    automobile producers have recently experienced financial difficulties                    and                    decreased product demand. Additionally, technological advances                    by direct                    and not-in-kind competitors could render the Company’s current products                    obsolete. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Changes                    in the solvency and liquidity of our customers*.                    Although the Company believes it has adequate credit policies,                    the                    creditworthiness of customers could                    change. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Fluctuations                    in the supply and prices of precious and base metals and fluctuations                    in                    the relationships between forward prices to spot prices.*                    The Company depends upon a reliable source of precious metals,                    used in the                    manufacture of its products, for itself and its customers. These                    precious                    metals are sourced from a limited number of suppliers. Decrease                    in the                    availability of these precious metals could impact the profitability                    of                    the Company. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *A                    decrease in the availability or an increase in the cost of energy,                    notably                    natural gas.*The                    Company consumes more than 10 million MMBTUs of natural gas annually.                    Compared with other sources of energy, natural gas is subject                    to                    volatility in availability and price, due to transportation,                    processing                    and storage requirements. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *The                    availability and price of rare earth compounds*.                    The Company uses certain rare earth compounds, produced in limited                    locations worldwide. * * |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *The                    availability and price of other raw materials*.                    The Company’s products contain a broad array of raw materials for which                    increases in price or decreases in availability could negatively                    impact                    the Company. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *The                    impact of increased employee benefit costs and/or the resultant                    impact on                    employee relations and human resources.*                    The Company employs approximately 7,000 employees worldwide and                    is subject                    to recent trends in benefit costs, notably pension and medical                    benefits. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | *Higher                    interest rates.*                    Approximately half of the Company’s debt is exposed to short-term interest                    rate fluctuations. An increase in long-term debt rates would                    impact the                    Company when the current long-term debt instruments mature, or                    if the                    Company requires additional long-term debt. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Changes                    in foreign currency exchange rates.*                    The Company regularly enters into transactions denominated in                    foreign                    currencies, and accordingly is exposed to changes in foreign                    currency                    exchange rates. The Company’s policy is to hedge the risks associated with                    monetary assets and liabilities resulting from these transactions.                    Additionally, the Company has significant foreign currency investments                    and                    earnings, which are subject to changes in foreign currency exchange                    rates                    upon translation into U.S. dollars. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Geographic                    expansions not developing as anticipated.*                    The Company expects markets in Asia to fuel growth for many served                    markets. China’s expected growth exceeds that of most developed countries,                    and failure of that growth to materialize would negatively impact                    the                    Company. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Economic                    downturns and inflation.*                    The diversity of the Company’s markets has substantially insulated the                    Company’s profitability from economic downturns in recent years. The                    Company is exposed to overall economic                    conditions. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Increased                    levels of worldwide political instability, as the Company operates                    primarily in the United States, the European community, Asia,                    the Russian                    Federation, South Africa and Brazil*.                    Much of the Company’s identified growth prospects are foreign markets. As                    such, the Company expects continued foreign investment and, therefore,                    increased exposure to foreign political instability. Additionally,                    the                    worldwide threat of terrorism can directly and indirectly impact                    the                    Company’s foreign and domestic                    profitability. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *The                    impact of the repeal of the U.S. export sales tax incentive and                    the                    enactment of the**American                    Jobs Creation Act of 2004**.*                    The Company is in the process of assessing the impact of these                    actions. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *Government                    legislation and/or regulation particularly on environmental and                    taxation                    matters*.                    The Company maintains manufacturing facilities and, as a result,                    is                    subject to environmental laws. The Company will be impacted by                    changes in                    these laws. The Company operates in tax jurisdictions throughout                    the                    world, and, as a result, is subject to changes in tax laws, notably                    in the                    United States, the United Kingdom, Germany, the Netherlands,                    Italy,                    Switzerland, France, Spain, South Africa, Brazil, Mexico, China,                    Korea,                    Japan, India and Thailand. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | *A                    slowdown in the expected rate of environmental                    requirements.*                    The Company’s Environmental Technologies segment’s customers, and to a                    lesser extent, the Process Technologies segment’s customers, are generally                    driven by increasingly stringent environmental regulations. A                    slowdown or                    repeal of regulations could negatively impact the                    Company. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Market          Risk Sensitive Transactions**

**Item          4.        Controls and          Procedures**

----

**PART        II - OTHER INFORMATION**

**Item        2.        Unregistered Sales        of Equity Securities and Use of Proceeds**

| (e)         | The                  Company has Board authorized programs for the repurchase of the                  Company’s                  stock. The following table represents repurchases under these programs                  for                  each of the three months of the quarter ended June 30,                  2005: |
|-----------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                  **Period**                                  |      | **Total                  Number of Shares Purchased**            |   |  **Average                  Price Paid per Share** |   |  **Total                  Number of Shares Purchased as Part of Publicly Announced Plans                  or                  Programs** |      |  **Maximum                  Number of Shares that May Yet Be Purchased Under the Plans or Programs                  (a)** |   |
|--------|-------------------------------------------------------------------|-----------|------------------------------------------------------------------|--------|---------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|-----------|--------------------------------------------------------------------------------------------------------------------------------|--------|
|   |                  4/1/05                  - 4/30/05           |      |                         656,200(b) |   | $                                                       | 28.87  |                                                                                                                                          |      |                     656,200                                                                                          |   |   |                     680,832 |   |
|   |                  5/1/05                  - 5/31/05           |      |                     172,000                            |   |                                                    | 29.50  |                                                                                                                                          |      |                     172,000                                                                                          |   |   | 6,508,832 |   |
|   |                  6/1/05                  - 6/30/05           |      |                     439,300                            |   |                                                    | 29.19  |                                                                                                                                          |      |                     439,300                                                                                          |   |   | 6,069,532 |   |
|        |           Total | 1,267,500 |                                                             | $      | 29.07                                                   |   |                                                                                                                                          | 1,267,500 |                                                                                                                           |   |   |   |

|   |  (a)  | Share                  repurchase program of 6 million shares authorized in October 2003                  and the                  share repurchase program of 6 million shares authorized by the                  Board of                  Directors on May 5, 2005. |   |
|--------|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |            |                                                                                                                                                                                                                                                                   |   |
|   |  (b)       | Excludes                383 shares obtained by the Rabbi Trust under the Deferred Compensation                Plan for Key Employees of Engelhard Corporation.                                                                                                         |   |

| **Item                6.**  | Exhibits                           | Pages                                                                                                                                                                                                                                                                                                                                                                               |
|----------------------------------|-----------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                             |                                    |                                                                                                                                                                                                                                                                                                                                                                                |
|  (10)                       |  Material                Contracts |                                                                                                                                                                                                                                                                                                                                                                                |
|                             |                                    |  (a)                    Amendment to Key Employees Stock Bonus Plan of Engelhard Corporation                  (The                  Key Employees Stock Bonus Plan of Engelhard Corporation is incorporated                  by                  reference to Form 10-K filed with the Securities and Exchange Commission                  on March 25, 2003).  |  34 |
|                             |  (31)(a)                           |  Rule                  13a-14(a)/15d-14(a) Certification of Chief Executive                  Officer.                                                                                                                                                                                                                                                                          | 35 |
|                             |                                    |                                                                                                                                                                                                                                                                                                                                                                                |   |
|                             |  (31)(b)                           | Rule                13a-14(a)/15d-14(a) Certification of Chief Financial                Officer.                                                                                                                                                                                                                                                                               | 36  |
|                             |                                    |                                                                                                                                                                                                                                                                                                                                                                                |   |
|                             |  (32)                              | Section                1350 Certifications of Chief Executive Officer and Chief Financial                Officer.*                                                                                                                                                                                                                                                             | 37  |

----

**SIGNATURES**

| Date:  |      August                   8, 2005 |   |     /s/                  Barry W. Perry Barry                  W. PerryChairman                  and ChiefExecutive                  Officer                 |
|--------|---------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                |   |                                                                                                                                                                        |
| Date:  |     August 8,                  2005        |   |     /s/                  Michael A. Sperduto Michael                  A. SperdutoVice                  President and ChiefFinancial                  Officer |
|   |                                                                |   |                                                                                                                                                                        |
| Date:  |      August                  8, 2005       |   |     /s/                  Alan J. Shaw Alan                  J. ShawController                                                                                |

----

**AMENDMENT        TO**

**KEY        EMPLOYEES STOCK BONUS PLAN OF**

**ENGELHARD        CORPORATION **

----

**Rule        13a-14(a)/15d-14(a)**

**Certification        of Chief Executive Officer**

| 1. | I                  have reviewed this quarterly report on Form 10-Q of the                  Company; |
|----|------------------------------------------------------------------------------------------------------|

| 2. | Based                  on my knowledge, this report does not contain any untrue statement                  of a                  material fact or omit to state a material fact necessary to make                  the                  statements made, in light of the circumstances under which such                  statements                  were made, not misleading with respect to the period covered by                  this                  report; |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | Based                  on my knowledge, the financial statements, and other financial                  information                  included in this report, fairly present in all material respects                  the                  financial condition, results of operations and cash flows of the                  registrant as of, and for, the periods presented in this                  report; |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | The                  registrant’s other certifying officer(s) and I are responsible for                  establishing and maintaining disclosure controls and procedures                  (as                  defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal                  control over financial reporting (as defined in Exchange Act Rules                  13a-15(f) and 15d-15(f)) for the registrant and we                  have: |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | Designed                  such disclosure controls and procedures, or caused such disclosure                  controls and procedures to be designed under our supervision, to                  ensure                  that material information relating to the registrant, including                  its                  consolidated subsidiaries, is made known to us by others within                  those                  entities, particularly during the period in which this report is                  being                  prepared; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Designed                  such internal control over financial reporting, or caused such                  internal                  control over financial reporting to be designed under our supervision,                  to                  provide reasonable assurance regarding the reliability of financial                  reporting and the preparation of financial statements for external                  purposes in accordance with generally accepted accounting                  principles; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Evaluated                  the effectiveness of the registrant’s disclosure controls and procedures                  and presented in this report our conclusions about the effectiveness                  of                  the disclosure controls and procedures, as of the end of the period                  covered by this report based on such evaluation;                  and |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Disclosed                  in this report any change in the registrant’s internal control over                  financial reporting that occurred during the registrant’s most recent                  fiscal quarter that has materially affected, or is reasonably likely                  to                  materially affect, the registrant’s internal control over financial                  reporting; and |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | The                  registrant’s other certifying officer(s) and I have disclosed, based on                  our most recent evaluation of internal control over financial reporting,                  to the registrant’s auditors and to the audit committee of registrant’s                  board of directors (or persons performing the equivalent                  function): |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | All                  significant deficiencies and material weaknesses in the design                  or                  operation of internal control over financial reporting which are                  reasonably likely to adversely affect the registrant’s ability to record,                  process, summarize and report financial information;                  and |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Any                  fraud, whether or not material, that involves management or other                  employees who have a significant role in the registrant’s internal control                  over financial reporting. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Date: |         August                  8, 2005 |   |     /s/                  Barry W. PerryBarry                  W. PerryChairman                  and ChiefExecutive                  Officer |
|-------|---------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Rule        13a-14(a)/15d-14(a)**

**Certification        of Chief Financial Officer**

| 1. | I                  have reviewed this quarterly report on Form 10-Q of the                  Company; |
|----|------------------------------------------------------------------------------------------------------|

| 2. | Based                  on my knowledge, this report does not contain any untrue statement                  of a                  material fact or omit to state a material fact necessary to make                  the                  statements made, in light of the circumstances under which such                  statements                  were made, not misleading with respect to the period covered by                  this                  report; |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3. | Based                  on my knowledge, the financial statements, and other financial                  information                  included in this report, fairly present in all material respects                  the                  financial condition, results of operations and cash flows of the                  registrant as of, and for, the periods presented in this                  report; |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4. | The                  registrant’s other certifying officer(s) and I are responsible for                  establishing and maintaining disclosure controls and procedures                  (as                  defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) )) and internal                  control over financial reporting (as defined in Exchange Act Rules                  13a-15(f) and 15d-15(f)) for the registrant and we                  have: |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | Designed                  such disclosure controls and procedures, or caused such disclosure                  controls and procedures to be designed under our supervision, to                  ensure                  that material information relating to the registrant, including                  its                  consolidated subsidiaries, is made known to us by others within                  those                  entities, particularly during the period in which this report is                  being                  prepared; |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Designed                  such internal control over financial reporting, or caused such                  internal                  control over financial reporting to be designed under our supervision,                  to                  provide reasonable assurance regarding the reliability of financial                  reporting and the preparation of financial statements for external                  purposes in accordance with generally accepted accounting                  principles; |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Evaluated                  the effectiveness of the registrant’s disclosure controls and procedures                  and presented in this report our conclusions about the effectiveness                  of                  the disclosure controls and procedures, as of the end of the period                  covered by this report based on such evaluation;                  and |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Disclosed                  in this report any change in the registrant’s internal control over                  financial reporting that occurred during the registrant’s most recent                  fiscal quarter that has materially affected, or is reasonably likely                  to                  materially affect, the registrant’s internal control over financial                  reporting; and |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 5. | The                  registrant’s other certifying officer(s) and I have disclosed, based on                  our most recent evaluation of internal control over financial reporting,                  to the registrant’s auditors and to the audit committee of registrant’s                  board of directors (or persons performing the equivalent                  function): |
|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | All                  significant deficiencies and material weaknesses in the design                  or                  operation of internal control over financial reporting which are                  reasonably likely to adversely affect the registrant’s ability to record,                  process, summarize and report financial information;                  and |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Any                  fraud, whether or not material, that involves management or other                  employees who have a significant role in the registrant’s internal control                  over financial reporting. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Date: |         August                  8, 2005 |   |     /s/                  Michael A. SperdutoMichael                  A. SperdutoVice                  President and ChiefFinancial                  Officer |
|-------|---------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**Section        1350 Certifications of**

**Chief        Executive Officer and Chief Financial Officer**

| Date:  |         August                  8, 2005 |   |     /s/                  Barry W. PerryBarry                  W. PerryChairman                  and ChiefExecutive                  Officer                 |
|--------|---------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                            |   |                                                                                                                                                                            |
| Date:  |         August                  8, 2005 |   |     /s/                  Michael A. SperdutoMichael                  A. SperdutoVice                  President and ChiefFinancial                  Officer |

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