---

#### UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

### FORM 10-Q

(Mark One)

#### [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2003
OR

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

For the transition period from ________ to _________

Commission file number 1-8142

ENGELHARD CORPORATION
(Exact name of Registrant as specified in its charter)

|DELAWARE                        | 22-1586002                     
|------------------------------- | -------------------------------
|(State or other jurisdiction or | (I.R.S. Employer Identification
|incorporation or organization)  | No.)                           

101 WOOD AVENUE, ISELIN, NEW JERSEY, 08830
(Address of principal executive offices)

(732) 205-5000(Registrant's telephone number, including area code)

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

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

Indicate the number of shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date.

Class of Common Stock            
Outstanding at July 31, 2003   $1 par value                                   
125,242,676

---

# PART I - FINANCIAL INFORMATION

Item 1.     Financial Statements

ENGELHARD CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                        (Thousands, except per share data)
                                   (Unaudited)

|                                                                                              | Three Months EndedJune 30, |         | Six Months EndedJune 30,
|--------------------------------------------------------------------------------------------- | -------------------------- | ------- | ------------------------
|
|Net sales                                                                                     | $                          | 929,358 |                         
|Cost of sales                                                                                 |                            | 766,461 |                         
|                                                                                              |                            |         |                         
|Gross profit                                                                                  |                            | 162,897 |                         
|Selling, administrative and other expenses                                                    |                            | 88,400  |                         
|Special charge/(credit), net                                                                  |                            | 7,802   |                         
|                                                                                              |                            |         |                         
|Operating earnings                                                                            |                            | 66,695  |                         
|Equity in earnings of affiliates                                                              |                            | 7,539   |                         
|Loss on investments                                                                           |                            | -       |                         
|Interest income                                                                               |                            | 1,123   |                         
|Interest expense                                                                              |                            | (5,876  | )                       
|                                                                                              |                            |         |                         
|Earnings before income taxes                                                                  |                            | 69,481  |                         
|Income tax expense                                                                            |                            | 15,447  |                         
|                                                                                              |                            |         |                         
|Net earnings before cumulative effect of a change in accounting                               |                            |         |                         
|principle, net of tax                                                                         |                            | 54,034  |                         
|Cumulative effect of a change in accounting principle,                                        |                            |         |                         
|net of tax of $1,390                                                                          |                            | -       |                         
|                                                                                              |                            |         |                         
|Net earnings                                                                                  | $                          | 54,034  |                         
|                                                                                              |                            |         |                         
|Earnings per share - basic:     Earnings before cumulative effect of a change in accounting   |                            |         |                         
|principle                                                                                     | $                          | 0.43    |                         
|Cumulative effect of a change in accounting principle, net of tax                             |                            | -       |                         
|                                                                                              |                            |         |                         
|Earnings per share - basic                                                                    | $                          | 0.43    |                         
|                                                                                              |                            |         |                         
|Earnings per share - diluted:     Earnings before cumulative effect of a change in accounting |                            |         |                         
|principle                                                                                     | $                          | 0.43    |                         
|Cumulative effect of a change in accounting principle, net of tax                             |                            | -       |                         
|                                                                                              |                            |         |                         
|Earnings per share - diluted                                                                  | $                          | 0.43    |                         
|                                                                                              |                            |         |                         
|Cash dividends paid per share                                                                 | $                          | 0.10    |                         
|                                                                                              |                            |         |                         
|Average number of shares outstanding - basic                                                  |                            | 125,261 |                         
|                                                                                              |                            |         |                         
|Average number of shares outstanding - diluted                                                |                            | 127,078 |                         
|                                                                                              |                            |         |                         

See the Accompanying Notes to the Unaudited Condensed Consolidated Financial Statements

# ENGELHARD CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Thousands)
                                   (Unaudited)

|                                           | June 30, 2003 | December 31,2002
|------------------------------------------ | ------------- | ----------------
|Cash                                       | $             | 95,979          
|Receivables, net                           |               | 346,687         
|Committed metal positions                  |               | 328,565         
|Inventories                                |               | 439,407         
|Other current assets                       |               | 88,927          
|Total current assets                       |               | 1,299,565       
|Investments                                |               | 137,413         
|Property, plant and equipment, net         |               | 855,347         
|Goodwill                                   |               | 272,685         
|Other intangible and noncurrent assets     |               | 191,426         
|Total assets                               | $             | 2,756,436       
|Short-term borrowings                      | $             | 130,114         
|Accounts payable                           |               | 210,257         
|Hedged metal obligations                   |               | 304,064         
|Other current liabilities                  |               | 268,548         
|Total current liabilities                  |               | 912,983         
|Long-term debt                             |               | 398,969         
|Other noncurrent liabilities               |               | 309,637         
|Shareholders' equity                       |               | 1,134,847       
|Total liabilities and shareholders' equity | $             | 2,756,436       

See the Accompanying Notes to the Unaudited Condensed Consolidated
                                       Financial Statements

# ENGELHARD CORPORATION
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Thousands)
                                   (Unaudited)

|                                                                                         | Six Months EndedJune 30,
|---------------------------------------------------------------------------------------- | ------------------------
|
|Cash flows from operating activities                                                     |                         
|Net earnings                                                                             | $                       
|Adjustments to reconcile net earnings to net cash      provided by operating activities: |                         
|Depreciation and depletion                                                               |                         
|Amortization of intangible assets                                                        |                         
|Loss on investments                                                                      |                         
|Equity results, net of dividends                                                         |                         
|Net change in assets and liabilities:                                                    |                         
|Materials Services related                                                               |                         
|All other                                                                                |                         
|                                                                                         |                         
|Net cash provided by operating activities                                                |                         
|                                                                                         |                         
|Cash flows from investing activities                                                     |                         
|Capital expenditures                                                                     |                         
|Proceeds from investments                                                                |                         
|Acquisitions and other investments                                                       |                         
|                                                                                         |                         
|Net cash used in investing activities                                                    |                         
|                                                                                         |                         
|Cash flows from financing activities                                                     |                         
|Proceeds from short-term borrowings                                                      |                         
|Repayment of short-term borrowings                                                       |                         
|Decrease in hedged metal obligations                                                     |                         
|Proceeds from issuance of long-term debt                                                 |                         
|Repayment of long-term debt                                                              |                         
|Purchase of treasury stock                                                               |                         
|Cash from exercise of stock options                                                      |                         
|Dividends paid                                                                           |                         
|                                                                                         |                         
|Net cash used in financing activities                                                    |                         
|Effect of exchange rate changes on cash                                                  |                         
|                                                                                         |                         
|Net increase in cash                                                                     |                         
|Cash at beginning of year                                                                |                         
|                                                                                         |                         
|Cash at end of period                                                                    | $                       
|                                                                                         |                         

See the Accompanying Notes to the Unaudited Condensed Consolidated
                             Financial Statements

# ENGELHARD CORPORATION
                          BUSINESS SEGMENT INFORMATION
                                   (Thousands)
                                   (Unaudited)

|                                                                                                     | Three Months EndedJune 30, |         | Six Months EndedJune 30,
|---------------------------------------------------------------------------------------------------- | -------------------------- | ------- | ------------------------
|
|Net Sales     Environmental Technologies                                                             | $                          | 209,153 |                         
|Process Technologies                                                                                 |                            | 139,833 |                         
|Appearance and Performance Technologies                                                              |                            | 175,190 |                         
|                                                                                                     |                            |         |                         
|Technology segments                                                                                  |                            | 524,176 |                         
|Materials Services                                                                                   |                            | 394,485 |                         
|All other                                                                                            |                            | 10,697  |                         
|                                                                                                     |                            |         |                         
|Total net sales                                                                                      | $                          | 929,358 |                         
|                                                                                                     |                            |         |                         
|Operating Earnings     Environmental Technologies                                                    | $                          | 31,489  |                         
|Process Technologies                                                                                 |                            | 24,571  |                         
|Appearance and Performance Technologies                                                              |                            | 18,613  |                         
|                                                                                                     |                            |         |                         
|Technology segments                                                                                  |                            | 74,673  |                         
|Materials Services                                                                                   |                            | 3,031   |                         
|All other                                                                                            |                            | (11,009 | )                       
|                                                                                                     |                            |         |                         
|Total operating earnings                                                                             |                            | 66,695  |                         
|Equity in earnings of affiliates                                                                     |                            | 7,539   |                         
|Loss on investments                                                                                  |                            | -       |                         
|Interest income                                                                                      |                            | 1,123   |                         
|Interest expense                                                                                     |                            | (5,876  | )                       
|                                                                                                     |                            |         |                         
|Earnings before income taxes                                                                         |                            | 69,481  |                         
|Income tax expense                                                                                   |                            | 15,447  |                         
|                                                                                                     |                            |         |                         
|Net earnings before cumulative effect of a                change in accounting principle, net of tax |                            | 54,034  |                         
|Cumulative effect of a change in accounting                                                          |                            |         |                         
|principle, net of tax of $1,390                                                                      |                            | -       |                         
|                                                                                                     |                            |         |                         
|Net earnings                                                                                         | $                          | 54,034  |                         
|                                                                                                     |                            |         |                         

See the Accompanying Notes to the Unaudited Condensed Consolidated
                            Financial Statements

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 1 - Basis of Presentation

The unaudited condensed consolidated financial statements of Engelhard
Corporation and subsidiaries (the "Company") contain all adjustments, which, in
the opinion of management, are necessary for a fair presentation of the results
for the interim periods presented. The financial statement results for interim
periods are not necessarily indicative of financial results for the full year.
These financial statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's 2002 Annual
Report to Shareholders. The unaudited condensed consolidated financial
statements include the accounts of the Company and its subsidiaries. All
significant intercompany transactions and balances have been eliminated in
consolidation. Certain prior-year amounts have been reclassified to conform with
the current-year presentation.

Note 2 - Special Charges and Credits

In the second quarter of 2003, the Company recorded a charge
of $7.8 million ($4.8 million after tax) related to a previously projected provision for the remaining lease
cost of certain minerals-storage facilities no longer needed because of productivity initiatives.
As of June 30, 2003, the Company's Appearance and Performance Technologies segment had ceased using these
facilities and, accordingly, a provision for these remaining lease rentals was reported in the "Special
charge/(credit), net" line in the "Condensed Consolidated Statements of Earnings."

In  the first  quarter of 2003,  the
     Company  recorded  charges totaling $8.7  million  ($5.6  million  after  tax)
primarily related to a management  consolidation and productivity  initiative in
the Environmental and Process  Technologies  segments and within the "All-Other"
category.  The amounts of $5.3 million ($3.5  million  after tax),  $2.6 million
($1.6 million after tax) and $0.8 million ($0.5 million after tax) were reported
in the Environmental  Technologies segment, the Process Technologies segment and
the  "All-Other"  category,  respectively.  These  charges are  included in the
"Special charge/(credit), net" line  in  the  "Condensed  Consolidated  Statements  of
Earnings."

In  the  Environmental  Technologies
segment,  the charge of $5.3  million  primarily  relates to the  closure of the
segment's Coleford, UK plant ($2.8 million) and employee severance costs related
to productivity  initiatives ($2.5 million).  The employee severance charges relate to
the reduction of 96 salaried and 12 hourly employees. The Coleford plant, which supports
the segment's catalyst canning operations,  will be shut down in phases
to be complete  by October  31,  2003.  As a result of closing  this plant,  the
segment will outsource the canning operations  associated with this business.
The closure  resulted in an impairment charge of $1.5 million to write down fixed assets and
other  exit-related  costs of $1.3 million. As of June 30, 2003, the liability associated with this charge was $1.7
million.

In the Process Technologies segment,
the charge of $2.6  million  primarily  relates to  employee  severance  and the
termination of an agency agreement associated with sales to the chemical-process
market. The employee severance charges relate to the reduction of 13 salaried employees.
Selling activities associated with the termination of this agency agreement will be covered by the segment's
internal sales force. As of June 30, 2003, the liability associated with this charge was $0.7
million.

In the "All-Other" category, the charge of $0.8 million
was for employee severance costs related to the reduction of six salaried employees.
As of June 30, 2003, the liability associated with this charge was $0.4
million.

On  October 29,  2002, a jury in the
New York County  Supreme Court awarded the Company $29.8 million in damages in a
breach of contract action the Company had brought against  Research  Corporation
and  Research  Corporation  Technologies  in  1998.  The  jury  found  that  the
defendants  did not share with the  Company  all of the  royalties  to which the
Company was  entitled  under a  royalty-sharing  agreement  it entered into with
Research  Corporation  in 1979.  Statutory  interest  to the date of the verdict
would have increased the amount awarded to approximately $42.2 million. On March
21, 2003, the Company entered into a settlement agreement,  releasing this claim
in exchange for payment of $38.0 million.  Accordingly,  the Company  recorded a
gain of $28.4  million  ($17.6  million after tax) in the first quarter of 2003,
net of legal fees and the portion of the settlement related to future royalties.
This gain was included in the Company's "All-Other" category and
in the "Special charge/(credit), net" line in the "Condensed Consolidated Statements of Earnings."

Note 3 - Accounting for Asset Retirement Obligations

The  Company  adopted  Statement  of
Financial  Accounting Standards (SFAS) No. 143, "Accounting for Asset Retirement
Obligations,"  on January 1, 2003.  This statement,  which  addresses  financial
accounting  and  reporting for  obligations  associated  with the  retirement of
tangible  long-lived assets and the associated asset retirement costs,  requires
the  fair  value  of a  liability  for  an  asset  retirement  obligation  to be
recognized  in the period in which it is incurred.  The liability is measured at
fair value and is adjusted in subsequent periods as accretion expense is recorded.
The corresponding  asset retirement costs are capitalized as part of the carrying amount of the related  long-lived  asset and
depreciated over the asset's useful life.

The   Company's   asset   retirement
obligations   relate  to  kaolin  mining   operations  of  its  Appearance  and
Performance  Technologies  segment. In order to provide kaolin-based products to
the  Company's  customers  and the  Process  Technologies  segment,  the Company
engages in kaolin mining  operations.  The  kaolin  mining  process  includes
exploration,   topsoil  and overburden removal, extraction of kaolin and the
subsequent reclamation of mined areas.  The Company has a legal  obligation to
provide for  reclamation of mined areas under state  regulations.  Prior to adoption
of SFAS No. 143,  the Company incurred  reclamation costs to comply with state
regulation  and expensed costs as the mined areas were reclaimed.

At January 1, 2003, the Company recognized
transition  amounts for existing asset retirement  obligation  liabilities,
associated capitalizable costs and accumulated depreciation. A non-cash transition
charge of $3.7 million ($2.3  million after tax or $0.02 per share on a diluted  basis)
was  recorded  on January 1, 2003 as the  cumulative  effect  of an
accounting change.  Pro forma net income and diluted earnings per share as if the provisions
of SFAS No. 143 had been adopted on January 1, 2002, excluding the cumulative effect of an accounting
change, for the six-month periods ended June 30, 2003 and June 30, 2002 are $112.7 million and
$0.88 per share and $112.1 million and $0.85 per share, respectively.

The following table represents the change in the Company's
asset retirement obligation liability for the six-month period ended June 30, 2003 (in millions):

|                                               |   | 2003 
|---------------------------------------------- | - | -----
|Asset retirement obligation at January 1, 2003 | $ | -    
|Liability recognized in transition             |   | 7.1  
|Accretion expense                              |   | 0.2  
|Payments                                       |   | (0.3)
|Asset retirement obligation at June 30, 2003   | $ | 7.0  

The pro forma amount of liability for asset retirement obligation
as if the provisions of SFAS No. 143 had been applied at January 1, 2002 is $6.7 million.

Note 4 - Inventories

Inventories consist of the following (in millions):

|                  | June 30, 2003 | December 31, 2002
|----------------- | ------------- | -----------------
|Raw materials     | $             | 109.3            
|Work in process   |               | 52.1             
|Finished goods    |               | 259.7            
|Precious metals   |               | 18.3             
|Total inventories | $             | 439.4            

The majority of the Company's physical metal is carried in the
committed metal positions line on the balance sheet at fair value with the remainder carried in the
inventory line at historical LIFO cost. The market value of the precious metals recorded at LIFO exceeded cost by $51.8 million and $58.3 million at June 30, 2003
and December 31, 2002, respectively.

In the normal course of business, certain customers and suppliers
deposit significant quantities of precious metals with the Company under a variety of arrangements.  Equivalent
quantities of precious metals are returnable as product or in other forms.  Metals held for the accounts
of customers and suppliers are not reflected in the Company's financial statements.

Note 5 - Comprehensive Income

Comprehensive income is summarized as follows (in millions):

|                                                                               | Three Months EndedJune 30, | Six Months EndedJune 30,
|------------------------------------------------------------------------------ | -------------------------- | ------------------------
|
|Net earnings                                                                   | $                          | 54.0                    
|Other comprehensive income (loss):     Foreign currency translation adjustment |                            | 18.9                    
|Cash flow hedge adjustment, net of tax                                         |                            | -                       
|Investment adjustment, net of tax                                              |                            | (0.2                    
|                                                                               |                            |                         
|Comprehensive income                                                           | $                          | 72.7                    
|                                                                               |                            |                         

The foreign currency translation adjustments are not currently
adjusted for income taxes as they relate to permanent investments in non-U.S. entities.

Note 6 - Earnings Per Share

The following table represents the computation of basic and diluted earnings per
share:

|                                                      | Three Months EndedJune 30, |       | Six Months EndedJune 30,
|----------------------------------------------------- | -------------------------- | ----- | ------------------------
|(in millions, except per share data)                 
|Basic EPS Computation                                 |                            |       |                         
|Net earnings applicable to common shares              | $                          | 54.0  |                         
|Average number of shares outstanding - basic          |                            | 125.3 |                         
|Basic earnings per share                              | $                          | 0.43  |                         
|Diluted EPS Computation                               |                            |       |                         
|Net earnings applicable to common shares              | $                          | 54.0  |                         
|Average number of shares outstanding - basic          |                            | 125.3 |                         
|Effect of dilutive stock options and other incentives |                            | 1.8   |                         
|Average number of shares outstanding - diluted        |                            | 127.1 |                         
|Diluted earnings per share                            | $                          | 0.43  |                         

Note 7 - Derivatives and Hedging

The Company reports all derivative instruments on the balance sheet at
their fair value. Changes in the fair value of derivatives designated as cash flow hedges are initially
recorded in comprehensive income and are reclassified to earnings in the period the hedged item is
reflected in earnings. Changes in the fair value of derivatives that are not designated as
cash flow hedges are reported immediately in earnings.

In order to manage in a manner consistent with historical processes,
procedures and systems and to achieve operating economies, certain economic
hedge transactions are not designated as hedges for accounting purposes. In
those cases, which primarily relate to platinum group metals, the Company will
continue to mark to market both the hedge instrument and the related position
constituting the risk hedged, recognizing the net effect in current earnings.

The Company documents all relationships between derivative hedging
instruments and items impacted by cash flow hedges at the time the hedges are
initiated, as well as its risk-management objectives and strategy for entering
into various hedge transactions. For the three and six-month periods ended June 30, 2003 and 2002, there was no gain or loss
recognized in earnings resulting from hedge ineffectiveness.

Foreign Exchange Contracts

The Company designates as cash flow hedges certain foreign currency forward
contracts entered into as hedges against anticipated receivables or payables
which will arise from forecasted transactions that are denominated in currencies
other than the functional currency of the entity which will hold those assets or
liabilities. The ultimate maturities of the contracts are timed to coincide with
the expected occurrence of the underlying sale or purchase transaction.

Other forward contracts entered into to hedge the exposure to
foreign currency fluctuations associated with certain monetary assets and
liabilities are not designated as hedging instruments for accounting purposes.
Changes in the fair value of these contracts are recorded in earnings to offset the
foreign exchange gains and losses arising from the effect of changes in exchange rates used to
measure related monetary assets and liabilities.

Commodity Contracts

The Company enters into contracts that are designated as cash flow hedges
to protect a portion of its exposure to movements in certain commodity prices.
The ultimate maturities of the contracts are timed to coincide with the expected
usage of these commodities.

Interest Rate Derivatives

The   Company  uses   interest  rate
derivatives  that are  designated as fair value hedges to help achieve its fixed
and floating rate debt objectives.  The Company  currently has two interest rate
swap agreements  with a total notional value of $100 million  maturing in August
2006 and three interest rate swap agreements with a total notional value of $150
million  maturing in May 2013. These  agreements  effectively  change fixed rate
debt obligations into floating rate debt  obligations.  The total notional values
and  maturity  dates of these  agreements  are  equal to the face  values and the
maturity  dates of the  related  debt  instruments.  For these fair value hedges,  there was no
gain or loss  recognized  from hedged firm  commitments no longer  qualifying as
fair value hedges for the three and  six-month  periods  ended June 30, 2003 and
2002.

Note 8 - Guarantees and Warranties

In  the normal  course of  business,
the Company incurs  obligations  with regard to contract  completion and product
performance.  Under  certain  circumstances,  these  obligations  are  supported
through  the  issuance of letters of credit.  At June 30,  2003,  the  aggregate
outstanding amount of letters of credit supporting such obligations  amounted to
$59.8  million,  of which $43.7 million will expire in less than one year,  $7.6
million will expire in two to three  years,  $0.2 million will expire in four to
five years,  and $8.3 million  will expire  after five years.  In the opinion of
management,  such  obligations  will  not  significantly  affect  the  Company's
financial  position  or  results  of  operations  as  the  Company   anticipates
fulfilling its performance obligations.

The Company accrues for anticipated product warranty expenses on
certain products. Accruals for anticipated warranty liabilities are recorded based upon a review of
historical warranty claims experience.  Adjustments are made to accruals as claim data and historical
experience warrant. The Company's accrual is primarily comprised of warranty liabilities within the
non-automotive business of the Environmental Technologies segment.

The change in the Company's product warranty reserves for the
six-month period ended June 30, 2003 is as follows (in millions):

|Balance at January 1, 2003 | $ | 11.1 |  
|-------------------------- | - | ---- | -
|Payments                   |   | (3.3 | )
|Provision                  |   | 1.3  |  
|Balance at June 30, 2003   | $ | 9.1  |  

Note 9 - Goodwill and Other Intangible Assets

Identifiable intangible assets, such as patents and trademarks, are amortized using the straight-line method over their estimated
useful  lives.  Goodwill  was  amortized by the  straight-line  method over
periods up to 40 years for all  acquisitions  completed  prior to June 30, 2001.
Effective  January  1,  2002,  with  the  adoption  of  Statement  of  Financial
Accounting  Standards No. 142,  "Goodwill and Other Intangible  Assets (SFAS No.
142)," goodwill and other  intangible  assets that have  indefinite  useful lives
are no longer amortized,  but are tested for impairment  based on the specific
guidance of SFAS No. 142.

The following information relates to acquired amortizable intangible assets
(in millions):

|                                       | As of June 30, 2003 | As of December 31, 2002
|-------------------------------------- | ------------------- | -----------------------
|
|Acquired Amortizable Intangible Assets |                     |                        
|Usage rights                           | $                   | 18.9                   
|Supply agreements                      |                     | 16.6                   
|Technology licenses                    |                     | 7.4                    
|Other                                  |                     | 3.7                    
|Total                                  | $                   | 46.6                   

The increased carrying amount of acquired amortizable intangible assets
is primarily due to the impact of foreign exchange.

Total accumulated amortization for goodwill and other intangible
assets amounted to $78.4 million and $76.8 million at June 30, 2003 and December 31, 2002, respectively.
As of June 30, 2003, the estimated aggregate amortization expense for each
of the five succeeding years is as follows (in millions):

|Estimated Annual Amortization Expense:
|--------------------------------------
|2003                                  
|2004                                  
|2005                                  
|2006                                  
|2007                                  

The following table represents the changes in the carrying amount of
goodwill for the six-month period ended June 30, 2003 (in millions):

|                                            | EnvironmentalTechnologies |  | ProcessTechnologies |  | Appearance &PerformanceTechnologies |   | AllOther |       | Total
|------------------------------------------- | ------------------------- |  | ------------------- |  | ----------------------------------- | - | -------- | ----- | -----
|Balance as of January 1, 2003               | $                         |  | 13.0                |  |                                     | $ |          | 106.9 |      
|Foreign currency translation     adjustment |                           |  | 0.1                 |  |                                     |   |          | 0.3   |      
|Balance as of June 30, 2003                 | $                         |  | 13.1                |  |                                     | $ |          | 107.2 |      

Note 10 - Committed Metal Positions and Hedged Metal Obligations

Both spot metal positions and derivative instruments are stated at fair value. Fair
value is based on published market prices. The following table sets forth the
Company's unhedged metal positions included in committed metal positions on the
Company's "Condensed Consolidated Balance Sheets":

Metal Positions Information (in millions):

|                               | June 30, 2003 |   | December 31, 2002
|------------------------------ | ------------- | - | -----------------
|
|Platinum group metals          | Short         | $ | 4.4              
|Gold                           | Long          |   | 1.5              
|Silver                         | Long          |   | 0.2              
|Base metals                    | Long          |   | 7.1              
|Total unhedged metal positions |               | $ | 13.2             

Committed metal positions may include significant advances made for the
     purchase of precious metals that have been delivered to the Company but for
which the final purchase price has not yet been determined. As of June 30, 2003,
all such contracts have been final priced and settled without any loss to the Company.

Derivative metal and foreign currency instruments
are used to hedge metal positions and obligations. As of June 30, 2003, over 99% of these instruments
have settlement terms of less than one year, with the remaining instruments expected to settle within
three years. These derivative metal and foreign currency instruments consist of the following:

Metal Hedging Instruments (in millions):

|                                       | June 30, 2003 |       | December 31, 2002
|-------------------------------------- | ------------- | ----- | -----------------
|
|Metal forwards/futures                 | $             | 592.1 |                  
|Eurodollar futures                     |               | 47.2  |                  
|Swaps                                  |               | 7.1   |                  
|Options                                |               | 15.7  |                  
|Foreign exchange      forwards/futures |               | -     |                  

Note 11 - New Accounting Pronouncements

In  January  2003,  the FASB  issued
Interpretation  No. 46, "Consolidation of Variable Interest Entities" (FIN 46).
FIN 46 addresses  consolidation  by business  enterprises  of variable  interest
entities  with certain  defined  characteristics.  This  interpretation  applies
immediately to variable interest entities created after January 31, 2003, and to
variable interest entities in which an enterprise obtains an interest after that
date. It applies in the first fiscal year or interim period beginning after June
15, 2003, to variable  interest entities in which an enterprise holds a variable
interest  that it acquired  before  February 1, 2003.  The Company did not obtain an interest
in any variable interest entities after January 31, 2003.  The Company believes that the provisions of FIN 46 will not have a
material impact on the Company's financial statements.

In  April 2003, the FASB issued SFAS
No. 149, " Amendment  of Statement  133 on  Derivative  Instruments  and Hedging
Activities."  This  Statement  amends and  clarifies  financial  accounting  and
reporting for derivative  instruments,  including certain derivative instruments
embedded  in other  contracts  and for  hedging  activities  under SFAS No. 133,
"Accounting for Derivative  Instruments and Hedging  Activities." This Statement
is effective for contracts  entered into or modified  after June 30, 2003,  with
certain  exceptions,  and for hedging  relationships  designated  after June 30,
2003.   The   provisions  of  this   Statement  that  relate  to  Statement  133
Implementation  Issues that have been  effective for fiscal  quarters that began
prior to June 15, 2003,  should  continue to be applied in accordance with their
respective  dates. This statement did not have any impact on the accompanying financial statements.

In  May 2003,  the FASB  issued SFAS
No. 150,  "Accounting for Certain Financial  Instruments with Characteristics of
both  Liabilities and Equity." This Statement  establishes  standards for how an
issuer   classifies   and   measures   certain   financial    instruments   with
characteristics  of both  liabilities  and equity.  It  requires  that an issuer
classify a financial  instrument  that is within its scope as a liability  or an
asset  in  some  circumstances.   This  Statement  is  effective  for  financial
instruments  entered  into or modified  after May 31,  2003,  and  otherwise  is
effective at the beginning of the first interim period  beginning after June 15,
2003.  The Company does not expect this  Statement to have a material  impact on
the Company's financial statements.

Note 12 - Stock Option and Bonus Plans

The  Company has  several  long-term
incentive  compensation  plans that allow for the  granting of stock  options to
employees.  Had  compensation  cost for the  Company's  stock  option plans been
determined  based on the fair value at grant date consistent with the provisions
of Statement of Financial  Accounting  Standards  ("SFAS") No.123,  "Accounting for Stock
Based  Compensation,"  as amended by SFAS No. 148, "Accounting for Stock-Based Compensation - Transition
and Disclosure," the  Company's  net earnings and earnings per share would
have been as follows:

|Three Months EndedJune 30,                                                                       |   | Six Months EndedJune 30,
|------------------------------------------------------------------------------------------------ | - | ------------------------
|(in millions, except per share data)                                                            
|Net earnings - as reported                                                                       | $ | 54.0                    
|Deduct: Total stock-based employee compensation expense determined under fair value based method |   |                         
|for all awards, net of tax                                                                       |   | (1.4                    
|Net earnings--pro forma                                                                          | $ | 52.6                    
|Earnings Per Share:Basic earnings per share--as reported                                         | $ | 0.43                    
|Basic earnings per share--pro forma                                                              |   | 0.42                    
|Diluted earnings per share--as reported                                                          |   | 0.43                    
|Diluted earnings per share--pro forma                                                            |   | 0.41                    

Note 13 - Supplemental Information

The following table presents certain supplementary information to the Company's
"Condensed Consolidated Statements of Cash Flows":

SUPPLEMENTARY CASH FLOW INFORMATION
(in millions)

|                                                                                             | Six Months EndedJune 30,
|-------------------------------------------------------------------------------------------- | ------------------------
|                                                                                             | 2003                    
|Materials Services related: Change in assets and liabilities - source/(use):     Receivables | $                       
|Committed metal positions                                                                    |                         
|Inventories                                                                                  |                         
|Other current assets                                                                         |                         
|Accounts payable                                                                             |                         
|Accrued liabilities                                                                          |                         
|Net cash flows from changes in assets and liabilities                                        | $                       
|All Other:Change in assets and liabilities - source/(use):                                   |                         
|Receivables                                                                                  | $                       
|Inventories                                                                                  |                         
|Other current assets                                                                         |                         
|Other noncurrent assets                                                                      |                         
|Accounts payable                                                                             |                         
|Accrued liabilities                                                                          |                         
|Noncurrent liabilities                                                                       |                         
|Net cash flows from changes in assets and liabilities                                        | $                       

Note 14 - Other Matters

The Company is involved in a value-added tax dispute in Peru. Management
believes the Company was targeted by corrupt officials within a former Peruvian
government. On December 2, 1999, Engelhard Peru, S.A., a wholly owned
subsidiary, was denied refund claims of approximately $28 million. The Peruvian
tax authority also determined that Engelhard Peru, S.A. is liable for
approximately $63 million in refunds previously paid, fines and interest as of
December 31, 1999. Interest and fines continue to accrue at rates established by
Peruvian law. The Peruvian Tax Court ruled on February 11, 2003 that Engelhard Peru,
S.A. was liable for these  amounts,  overruling  precedent to apply a "form over
substance"  theory  without any  determination  of fraudulent  participation  by
Engelhard Peru, S.A. The Tax Court is part of the Peruvian Ministry of Economics
and Finance. Engelhard Peru, S.A. is contesting these determinations vigorously,
and management  believes,  based on  consultation  with counsel,  that Engelhard
Peru,  S.A.  is  entitled  to all  refunds  claimed  and is not liable for these
additional taxes, fines or interest. In late October 2000, a criminal proceeding
alleging  tax fraud and  forgery  related to this  value-added  tax  dispute was
initiated  against two Lima-based  officials of Engelhard  Peru,  S.A.  Although
Engelhard Peru, S.A. is not a defendant, it may be civilly liable in Peru if its
representatives   are  found  responsible  for  criminal  conduct.  In  its  own
investigation,  and in  detailed  review  of the  materials  presented  in Peru,
management has not seen any evidence of tax fraud by these  officials.
Accordingly,  Engelhard Peru, S.A. is assisting in the vigorous  defense of this
proceeding.  Management believes the maximum economic exposure is limited to the
aggregate value of all assets of Engelhard Peru, S.A. That amount, which is approximately $30 million
including unpaid refunds, has been fully provided for in the accounts of the Company.

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

Results of Operations

Comparison of the Second Quarter of 2003
with the Second Quarter of 2002

Net earnings decreased 10% to $54.0 million in the
second quarter of 2003 from $60.1 million in the same period of 2002. Operating earnings for the second
quarter of 2003 decreased 25% to $66.7 million from $89.2 million in the same period of 2002. Lower operating
earnings from Appearance and Performance Technologies and Materials Services were partially offset
by higher operating earnings from Environmental and Process Technologies.

For the second quarter ended June 30, 2003, operating earnings
include a charge of $7.8 million related to lease commitments for idle facilities (see Note 2, "Special
Charges and Credits," for further detail).  For the second quarter ended June 30, 2002, operating
earnings include a restructuring charge of $3.1 million and an insurance settlement gain of $11.0
million.

The  effective tax rate was 22.2% in
the second  quarter of 2003 compared with 25.0% in the same period of 2002.  The
lower rate was a result of lowering the 2003 annual rate to 23.0% primarily from
higher percentage depletion deductions and research and development tax credits,
the  recognition  of foreign  tax items and a shift in the  geographical  mix of
earnings.

The   Company's   share  of   equity
     earnings from  affiliates  was $7.5 million for the second  quarter of 2003
compared with $4.4 million for the same period in 2002.  Higher equity  earnings
were primarily from Engelhard-CLAL,  a 50%-owned joint venture that manufactures
and markets certain products  containing  precious  metals,  partially offset by
N.E.  Chemcat,  a 38.8%-owned,  publicly traded Japanese  corporation  that is a
leading producer of automotive and chemical catalysts,  electronic chemicals and
other precious-metals-based products. Higher equity earnings from Engelhard-CLAL
resulted from higher  platinum  prices and related  realized  gains in excess of
original  estimates and the  strengthening  of the Euro  versus the US  dollar.  As
previously disclosed, the Company and its partner, Fimalac, are currently in the
process of liquidating the Engelhard-CLAL  joint venture.  Lower equity earnings
from N.E. Chemcat resulted from  environmental  remediation  costs and a loss on
the sale of investment securities.

Interest expense decreased 18% to $5.9 million for the second
quarter of 2003 compared with $7.2 million for the same period in 2002.  Interest income was $1.1 million
in the second quarter of 2003 compared with $0.3 million for the same period in 2002.  Lower interest
expense was primarily due to lower short-term borrowings.

Net sales decreased 5% to $0.9 billion in the second
quarter of 2003 from $1.0 billion for the same period in 2002. Lower sales resulted from
decreased sales in the Materials Services segment as a result of lower volumes and prices for certain
platinum group metals.

Environmental Technologies

Operating earnings increased 13% to $31.5 million in the second quarter of
2003 from $28.0 million in the same period of 2002.  Net sales for the
second quarter of 2003 increased 23% to $209.2 million from $170.6 million in the
same period of 2002.

The majority of this segment's sales
are derived from  technologies to control pollution from
mobile  sources,   including   gasoline  and   diesel-powered   passenger  cars,
sport-utility vehicles, trucks, buses and off-road vehicles.

Operating earnings were higher primarily from increased volumes
and a favorable product mix of mobile environmental markets, the impact of a manufacturing consolidation
charge of $3.1 million recorded in the second quarter of 2002 and the favorable impact of foreign exchange
of $3.8 million.  The increase in operating earnings was partially offset by lower volumes of emission-control
systems for gas turbines used in power-generation applications, lower volumes to the surface coatings
markets related to lower demand from the aerospace industry, higher depreciation costs of $3.6 million
and higher energy costs of $0.8 million.

Sales  increased   primarily  from  the  addition  of  higher  pass-through
substrate costs and the favorable  impact of foreign  exchange, which collectively accounted for more than
three-quarters of the increase. Sales were also favorably impacted by higher volumes and a
favorable product mix in both diesel OEM and diesel retrofit markets of $8.1 million. The increase in sales was
partially offset by $10.0  million on lower  volumes of  emission-control  systems for gas
turbines  used in  power-generation applications and by $3.6 million on lower
volumes to the surface coatings markets.

Process Technologies



Operating earnings increased 7% to $24.6 million in the second
quarter of 2003 from $23.0 million in the same period of 2002. Net sales for the
second quarter of 2003 increased 3% to $139.8 million from $136.4 million in
the same period of 2002.

Operating earnings were higher primarily from increased
demand for  new  technologies  offered  to  the   petroleum-refining,   polyolefin  and
gas-to-liquids  markets, lower raw material costs of $1.5 million and the favorable  impact of
foreign  exchange of $1.5 million. The increase in operating earnings was partially offset by lower
sales volumes to chemical-process markets, higher energy costs of $1.6 million and higher nickel costs
of $0.7 million.

Sales   increased   primarily   from
increased  demand for the new  technologies  offered to the  petroleum-refining,
polyolefin  and  gas-to-liquids  markets  which  aggregated  $6.6 million and the
favorable impact of foreign exchange of $4.0 million. Sales were reduced by $4.6
million  due to lower  precious  metal  prices,  which  are  passed  through  to
chemical-process   catalyst   customers   in  Europe.

Appearance and Performance Technologies

Operating earnings decreased 25% to $18.6 million in the second
quarter of 2003 from $24.7 million in the same period of 2002. Net sales increased 3% to $175.2 million
for the second quarter of 2003 from $170.6 million in the same period of 2002.

Operating earnings decreased primarily from a charge of $7.8
million recorded in the second quarter of 2003 related to lease commitments for idle facilities (see
Note 2, "Special Charges and Credits," for further detail), higher energy costs of $3.3 million and
lower sales volumes to certain performance minerals markets.  The decrease in operating earnings
was partially offset by increased sales volumes to the coatings, cosmetics/personal care and
automotive markets and lower costs from productivity improvements.

Materials Services

Operating earnings decreased 89% to $3.0 million in the
second quarter of 2003 from $27.2 million in the same period of 2002. Net sales decreased 20% to
$394.5 million in the second quarter of 2003 from $495.6 million in the same period of 2002.

Operating   earnings  in  both
years were  favorably  affected by several items that  triggered  recognition of
events  reflecting  operations  from prior  periods.  Operating  earnings in the
second quarter of 2003 benefited from a contract settlement netting $9.3 million
while the prior  year  period  included  $22.0  million  of  income  related  to
platinum-group-metal  transactions  realized previously but deferred pending the
resolution of certain contractual provisions, and an insurance settlement gain of
$11.0 million.  The benefit in the current year was partially  offset by
performance issues at our domestic refinery.  These issues, which are apart from
the current level of operations, are being actively addressed by management. The
prior period benefits were partially offset by unusually high operating expenses
from  multiple  causes,  including  legal and  compensation  expenses.  Overall,
reduced  industrial  demand for certain  platinum group metals and lower results
from recycling services continue to adversely impact this segment.

Comparison of the First Six Months of 2003
with the First Six Months of 2002

Net  earnings  decreased 2% to
$110.7  million in the first six months of 2003 from $112.4  million in the same
period of 2002.  The Company  recorded an  after-tax  transition  charge of $2.3
million on  January 1, 2003 as the  cumulative  effect of an  accounting  change
associated with the adoption of SFAS No. 143 (see Note 3,  "Accounting for Asset
Retirement  Obligations," for further detail).  Operating earnings for the first
six months of 2003  decreased 11% to $143.9  million from $162.3  million in the
same period of 2002.  For the six month period  ended June 30,  2003,  operating
earnings include a charge of $7.8 million related to lease  commitments for idle
facilities,  restructuring charges totaling $8.7 million and a royalty settlement gain
of $28.4  million.  For the six month  period  ended  June 30,  2002,  operating
earnings  include  a  restructuring  charge  of $3.1  million  and an  insurance
settlement gain of $11.0 million.

Operating earnings in the
Company's "All-Other" category increased primarily from the royalty settlement gain reported in the
first quarter of 2003.

The  effective  tax  rate  was
23.0% in the first six months of 2003 compared with 25.0% for the same period of
2002.  The lower rate was  primarily the result of higher  percentage  depletion
deductions and research and development tax credits,  the recognition of foreign
tax items and a shift in the geographical mix of earnings.

The  Company's share of equity
earnings  from  affiliates  was $13.2  million  for the first six months of 2003
compared  with $8.1  million  for the same  period  in 2002.  The  increase  was
primarily due to higher equity earnings from Engelhard-CLAL resulting from higher platinum
prices  and  related  realized  gains in excess of  original  estimates  and the
strengthening  of the Euro  versus the US dollar  and  higher  Heesung-Engelhard
equity  earnings.  The increase in equity  earnings was  partially  offset by lower
equity earnings from N.E. Chemcat resulting from environmental  remediation costs
and a loss on the sale of investment securities.

Interest expense decreased 17%
to $12.0  million in the first six months of 2003 from $14.5 million in the same
period of 2002.  Interest  income  increased  to $1.7  million  in the first six
months of 2003 from $0.7  million  in the same  period in 2002.  Lower  interest
expense was due to decreased  borrowings and lower  short-term  interest  rates.

Net sales decreased 11% to $1.8 billion in the first six
months of 2003 from $2.0 billion in the same period in 2002. Lower sales resulted from
decreased sales in the Materials Services segment as a result of lower volumes and prices for certain
platinum group metals.

Environmental Technologies

Operating earnings decreased 17% to $56.1 million in the
first six months of 2003 from $67.6 million in the same period of 2002.
Net sales for the first six months of 2003 increased 26% to $422.7 million from
$335.0 million in the same period of 2002.

Operating earnings were lower  primarily  from lower volumes of  emission-control  systems for gas
turbines used in power-generation  applications and lower volumes to the surface
coatings  markets.  This decline  resulted from a difficult  comparison  from an
exceptionally strong year-ago first quarter in the energy market and lower demand from
the aerospace industry.  Earnings also decreased from a management consolidation
and productivity initiative charge of $5.3 million (see Note 2, "Special Charges and Credits,"
for further detail) recorded in the first quarter of 2003, the reversal of a warranty accrual of $4.9
million in the first quarter of 2002 for a particular  stationary-source,  emission-control capital equipment
project as a result of improved  catalyst  technology, higher depreciation costs of $5.8 million and
higher energy costs of $1.7 million.  This decrease was partially offset by increased volumes and a
favorable product mix of mobile environmental markets,  the favorable impact of
foreign exchange of $7.3 million and a manufacturing consolidation charge of $3.1 million recorded in the second quarter
of 2002.

Sales increased primarily from the
addition of higher  pass-through  substrate  costs and the  favorable  impact of
foreign exchange,  which collectively accounted for more than three-quarters of the increase.
Sales were also favorably impacted by higher volumes and a favorable product mix
in both diesel OEM and diesel retrofit  markets.  Higher sales were partially  offset by
$14.9 million on lower volumes of emission-control systems for gas turbines used
in  power-generation  applications  and by $7.9 million on lower  volumes to the
surface coatings markets.

Process Technologies

Operating earnings decreased 5% to $38.1 million in the
first six months of 2003 from $40.0 million in the same period of 2002. Net sales for the first
six months of 2003 increased 3% to $258.4 million from $251.9 million in the
same period of 2002.

Operating     earnings     decreased
     primarily  from  lower  sales  volumes  to   chemical-process   markets,  a
productivity  charge of $2.6 million (see Note 2, "Special Charges and Credits,"
for  further  detail)  recorded in the first  quarter of 2003 and higher  energy
costs of $3.6 million. These decreases were partially offset by increased demand
for  new  technologies  offered  to  the   petroleum-refining,   polyolefin  and
gas-to-liquids  markets,  lower  raw  material  costs  of  $2.9  million  and the
favorable impact of foreign exchange of $2.6 million.

Sales   increased   primarily   from
increased  demand for the new  technologies  offered to the  petroleum-refining,
polyolefin  and  gas-to-liquids  markets  which  aggregated  $20.1 million and the
favorable impact of foreign exchange of $7.3 million. Sales were reduced by $8.0
million  due to lower  precious  metal  prices,  which  are  passed  through  to
chemical-process   catalyst   customers   in  Europe   and lower sales to
chemical-process markets of $6.2 million primarily from the timing of orders.

Appearance and Performance Technologies

Operating  earnings  decreased
7% to $37.2  million in the first six  months of 2003 from $39.9  million in the
same period of 2002.  Net  sales for the first  six  months of 2003  increased  4% to $334.4
million from $323.0 million in the same period of 2002.

Operating     earnings     decreased
primarily  from a charge of $7.8 million  recorded in the second quarter of 2003
related to lease  commitments for idle  facilities,  higher energy costs of $6.9
million and lower sales volumes to certain  performance  minerals  markets.  The
decrease in operating  earnings was partially  offset by increased sales volumes
to the coatings,  cosmetics/personal care and automotive markets and lower costs
from productivity improvements.

Materials Services

Operating earnings decreased 80% to $7.5 million in the first six months of
2003 from $37.4 million in the same period of 2002. Net sales for the first six months of 2003 decreased
32% to $0.7 billion from $1.1 billion in the same period of 2002.

Operating   earnings  in  both
years were  favorably  affected by several items that  triggered  recognition of
events reflecting operations from prior periods. Operating earnings in the first
six-months of 2003  benefited  from a contract  settlement  netting $9.3 million
while the year ago prior  period  included  $22.0  million of income  related to
platinum-group-metal  transactions  realized previously but deferred pending the
resolution of certain contractual  provisions,  an insurance  settlement gain of
$11.0  million and $5.5 million of income  related to a previously  unrecognized
contractual  benefit.  The benefit in the current year was  partially  offset by
 performance  issues at our domestic refinery.  These issues,  which are
apart from the current  level of  operations,  are being  actively  addressed by
management.  The prior period  benefits were partially  offset by unusually high
operating  expenses  from  multiple  causes,  including  legal and  compensation
expenses.  Overall,  reduced industrial demand for certain platinum group metals
and lower  results from  recycling  services  continue to adversely  impact this
segment.

# Financial Condition and Liquidity

Working capital was $386.6 million at June 30, 2003
     compared  with $179.8  million at December 31, 2002.  The current ratio was
1.4 at June 30, 2003 compared with 1.1 at December 31, 2002.  The percentage of total debt
to total  capitalization  was 32% at June 30, 2003 compared with 36% at December
31, 2002.

The variance in cash flows from operating activities
primarily occurred in the Materials  Services segment and reflects
changes in metal positions used to facilitate  requirements of the Company,  its
metals  customers and  suppliers (see Note 13, "Supplemental Information," for Materials
Services variances).  Materials  Services  routinely  enters into a
variety of arrangements for the sourcing of metals. Generally,  transactions are
hedged on a daily basis.  Hedging is  accomplished  primarily  through  forward,
future and option contracts.  However, in closely monitored situations for which
exposure  levels have been set by senior  management,  the Company  from time to
time holds large  unhedged  industrial  commodity  positions that are subject to
future  market price  fluctuations.  These  positions  are included in committed
metal  positions  along with hedged  metal  holdings.  The bulk of hedged  metal
obligations  represent spot short positions.  As these positions generate cash,
their  cash  effect is  included  in the  financing  activities  section  of the
Company's  "Condensed Consolidated  Statements  of Cash  Flows."  Other  than  in  closely
monitored  situations,  these  positions are hedged with forward  purchases.  In
addition,  the  aggregate  fair  value of  derivatives  in a loss  position  is
reported  in  hedged  metal  obligations  (derivatives  in a gain  position  are
included in committed metal positions).  Materials Services works to ensure that
the Company and its customers have an uninterrupted source of metals,  primarily
platinum group metals, utilizing supply contracts and commodities markets around
the world.  Committed metal positions may include significant  advances made for the
purchase of  precious  metals  that have been  delivered  to the Company but for
which the final purchase price has not yet been determined. As of June 30, 2003,
all such contracts have been final priced and settled without any loss to the Company.

The variance in cash flows from investing
activities is primarily related to liquidating distributions received in connection with the 2002 plan to
unwind the Company's Engelhard-CLAL joint venture and changes in capital expenditures.

The  variance  in  cash  flows
     from  financing  activities  was  impacted  by a  change  in  hedged  metal
obligations,  proceeds received from the issuance of long-term debt in May 2003,
a decrease in short-term  borrowings and higher net stock repurchase activity.
The decrease in hedged metal obligations combined with the decrease in committed
metal  positions for the six month period ended June 30, 2003 was largely due to
the  conclusion  of a large  metal  contract,  combined  with  lower  levels  of
industrial demand.

Through a public debt offering
in May 2003,  the  Company  issued $150  million of 10 year  notes.  These notes
mature on May 15, 2013 and bear an interest rate of 4.25%.  As discussed in Note
7,  "Derivatives  and Hedging,"  these notes were effectively changed from a fixed rate debt
obligation to a floating rate debt  obligation  through the use of interest rate
swap agreements. The notes were issued under the Company's existing $300 million
shelf registration.

The Company has consistently derived considerable cash flow from
operations, which has been used, along with both short- and long-term debt, to
pay for capital expenditures, acquisitions, treasury stock purchases, dividends and other corporate
requirements. The continuation of these levels of cash flow is expected but is
subject to risk factors disclosed in the Company's 2002 Form 10-K and in the
Forward-Looking Statements section of this Form 10-Q. In addition, the Company has always
maintained investment-grade credit ratings that it considers important for
cost-effective and ready access to the credit markets. Management fully expects
to be able to obtain future funding from both short- and long-term debt for cash
requirements in excess of those from operations. In the event that any of these
sources prove to be below expectations, the Company has access to committed
lines of credit aggregating $800 million.

# Forward-Looking Statements

This document contains
forward-looking   statements  within  the  meaning  of  the  Private  Securities
Litigation  Reform Act of 1995.  These  statements  relate to analyses and other
information  that are based on  forecasts  of future  results and  estimates  of
amounts  not yet  determinable.  These  statements  also  relate  to the  future
prospects,   developments  and  business   strategies.   These   forward-looking
statements   are   identified  by  their  use  of  terms  and  phrases  such  as
"anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan,"
"predict," "project," "will" and similar terms and phrases, including references
to assumptions. These forward-looking statements involve risks and uncertainties
that may cause the Company's actual future  activities and results of operations
to  be  materially   different  from  those   suggested  or  described  in  this
document.

Among  the risks  and  uncertainties
that could cause actual results to differ materially are the following:

| | competitive pricing or product
        development activities that could affect the demand for our products, particularly competing
        catalyst and kaolin producers                                      
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | the Company's ability to
        achieve and execute internal business plans                                                                                                                                   
| | worldwide political instability as the
        Company operates primarily in the United States, the European community, the Asia-Pacific region,
        the Russian Federation, South Africa and South America
| | alliances and geographic
        expansions developing differently than anticipated                                                                                                                            
| | fluctuations in the supply and
        prices of precious and base metals and fluctuations in the relationships between forward prices
        to spot prices                                                  
| | government legislation and/or
        regulation (particularly on environmental issues), including tax obligations                                                                                             
| | the impact of the anticipated
        repeal of the current U.S. export sales tax incentive                                                                                                                    
| | technology, manufacturing and
        legal issues                                                                                                                                                             
| | the impact of any economic
        downturns and inflation                                                                                                                                                     
| | interest rate risk, foreign
        currency exchange rate risk, commodity price risk and credit risk                                                                                                          
| | the impact of higher energy and
        raw material costs, and the availability of natural gas and rare earth elements                                                                                        
| | the success of research and
        development activities and the speed with which regulatory authorizations and product launches
        may be achieved                                                     
| | the impact of increased
        employee benefit costs and/or the resultant impact on employee relations                                                                                                       
| | contingencies related to actual
        or alleged environmental contamination to which the Company may be a party                                                                                             
| | the impact of acquisitions,
        divestitures and restructurings                                                                                                                                            
| | overall demand for the Company's
        products, including demand from the worldwide automotive and chemical-process markets                                                                                 
| | product quality/performance issues                                                                                                                                                                             
| | exposure to product liability and other types of lawsuits                                                                                                                                                      
| | the impact of physical inventory losses,
        particularly with regard to precious and base metals                                                                                                          
| | the loss of business from property and
        casualty exposure                                                                                                                                               

Investors are cautioned not to place undue reliance upon these forward-looking statements, which speak only as of their dates.  The
Company disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise.

|Item 4. | Controls and Procedures | 
|------- | ----------------------- | 

The    Company    carried   out   an
evaluation,  under the supervision and with the  participation  of the Company's
management,  including the Company's Chief Executive Officer and Chief Financial
Officer,  as of June 30, 2003, of the  effectiveness of the design and operation
of the Company's  disclosure  controls and  procedures  pursuant to Exchange Act
Rule 13a-15.  Based upon that evaluation,  the Chief Executive Officer and Chief
Financial  Officer  concluded  that  the  Company's   disclosure   controls  and
procedures as of June 30, 2003 were  effective to provide  reasonable  assurance
that material  information  related to the Company  (including its  consolidated
subsidiaries)  required  to be included in the  Company's  periodic  SEC filings
would be timely  communicated to them. There have been no significant changes in
the  Company's   internal   control  over   financial   reporting   which  could
significantly affect internal control over financial reporting subsequent to the
date the Company carried out its evaluation.

The  Company's management, including
the CEO and CFO, do not expect  that our  disclosure  controls  or our  internal
control  over  financial  reporting  will  prevent  all errors and all fraud.  A
control  system,  no matter how well  conceived and  operated,  can provide only
reasonable,  not absolute,  assurance  that the objectives of the control system
are met.  Further,  the design of a control  system  must  reflect the fact that
there are resource constraints,  and the benefits of controls must be considered
relative to their  costs.  Because of the  inherent  limitations  in all control
systems,  no  evaluation  of controls can provide  absolute  assurance  that all
control  issues and  instances  of fraud,  if any,  within the Company have been
detected.  These  inherent  limitations  include the reality that  judgments and
estimates can be faulty,  and that  breakdowns can occur because of simple error
or mistake. Additionally, controls can be circumvented by the individual acts of
some persons or by collusion of two or more people.  The design of any system of
controls also is based in part upon certain  assumptions about the likelihood of
future  events,  and there can be no  assurance  that any design will succeed in
achieving its stated goals under all potential future conditions. Because of the
inherent  limitations in a cost-effective  control system,  misstatements due to
error or  fraud  may  occur  and not be  detected.  Accordingly,  the  Company's
disclosure  controls  and  procedures  are designed to provide  reasonable,  not
absolute, assurance that the objectives of our disclosure control system are met
and,  as set forth  above,  the  Company's  Chief  Executive  Officer  and Chief
Financial Officer have concluded, based on their evaluation as of June 30, 2003,  that our disclosure controls and procedures were
effective to provide reasonable  assurance that the objectives of our disclosure
control system were met.

# PART II - OTHER INFORMATION

Item 4.     Submission of Matters to a Vote of Security Holders

1. The Company's Annual Meeting of the Shareholders was held on
Thursday, May 1, 2003.
2. Results of votes of security holders.

| |                   
| | ------------------
| | Marion H. Antonini
| | Henry R. Slack    

| | James V. Napier, Norma T. Pace, Louis J. Giuliano, Barry W. Perry
        and Douglas G. Watson continued as Directors after the annual meeting.
| | ------------------------------------------------------------------------------------------------------------------------------------------------

|Item 6. | Exhibits and Reports on Form 8-K | Pages
|------- | -------------------------------- | -----
|        |                                  |      

|(a) | (12)    | Computation of the Ratio of Earnings to Fixed Charges.                                                                                                                                                                 | 28   
|--- | ------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -----
|    |         |                                                                                                                                                                                                                        |      
|    | (31)(a) | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.                                                                                                                                                     | 29-30
|    |         |                                                                                                                                                                                                                        |      
|    | (31)(b) | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.                                                                                                                                                     | 31-32
|    |         |                                                                                                                                                                                                                        |      
|    | (32)    | Section 1350 Certifications of Chief Executive
     Officer and Chief Financial Officer. *                                                                                                                             | 33   
|    |         |                                                                                                                                                                                                                        |      
|(b) |         | In a report on Form 8-K furnished
     to the Securities and Exchange Commission (SEC) on April 29, 2003, the Company reported that it furnished
     its earnings release with the SEC for the first quarter of 2003. |      

*  This certification accompanies this Report pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the
Company for purposes of Section 18 or any other provision of the
Securities Exchange Act of 1934, as amended.

# SIGNATURES

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

|      |                 |  | ENGELHARD CORPORATION   
|----- | --------------- |  | ------------------------
|      |                 |  | (Registrant)            
|      |                 |  |                         
|      |                 |  |                         
|      |                 |  |                         
|      |                 |  |                         
|      |                 |  |                         
|Date: | August 14, 2003 |  | /s/ Barry W. Perry      
|      |                 |  | Barry W. Perry          
|      |                 |  | Chairman and Chief      
|      |                 |  | Executive Officer       
|      |                 |  |                         
|      |                 |  |                         
|      |                 |  |                         
|Date: | August 14, 2003 |  | /s/ Michael A. Sperduto 
|      |                 |  | Michael A. Sperduto     
|      |                 |  | Vice President and Chief
|      |                 |  | Financial Officer       
|      |                 |  |                         
|      |                 |  |                         
|      |                 |  |                         
|Date: | August 14, 2003 |  | /s/ Alan J. Shaw        
|      |                 |  | Alan J. Shaw            
|      |                 |  | Controller              

EXHIBIT (12)

# ENGELHARD CORPORATION
                               COMPUTATION OF THE RATIO OF EARNINGS TO FIXED CHARGES
                                               (Dollars in Millions)
                                                    (Unaudited)

|                                                                                                                  | Six Months EndedJune 30, | Years Ended December 31,
|----------------------------------------------------------------------------------------------------------------- | ------------------------ | ------------------------
|
|Earnings from continuing operationsbefore provision for income taxes andcumulative effect of an accounting change | $                        | 146.7                   
|                                                                                                                  |                          |                         
|Add/(deduct)                                                                                                      |                          |                         
|                                                                                                                  |                          |                         
|Portion of rents representative     of the interest factor                                                        |                          | 5.8                     
|                                                                                                                  |                          |                         
|Interest on indebtedness                                                                                          |                          | 12.0                    
|                                                                                                                  |                          |                         
|Equity dividends                                                                                                  |                          | 4.3                     
|                                                                                                                  |                          |                         
|Equity in (earnings) losses     of affiliates                                                                     |                          | (13.2)                  
|                                                                                                                  |                          |                         
|Earnings, as adjusted                                                                                             | $                        | 155.6                   
|                                                                                                                  |                          |                         
|Fixed Charges                                                                                                     |                          |                         
|                                                                                                                  |                          |                         
|Portion of rents representative      of the interest factor                                                       | $                        | 5.8                     
|                                                                                                                  |                          |                         
|Interest on indebtedness                                                                                          |                          | 12.0                    
|                                                                                                                  |                          |                         
|Capitalized interest                                                                                              |                          | 1.5                     
|                                                                                                                  |                          |                         
|Fixed charges                                                                                                     | $                        | 19.3                    
|                                                                                                                  |                          |                         
|Ratio of Earnings to Fixed Charges                                                                                |                          | 8.06                    

EXHIBIT (31)(a)

# Rule 13a-14(a)/15d-14(a)
                                                Certification of Chief Executive Officer

I, Barry W. Perry, Chairman and Chief Executive Officer
of Engelhard Corporation (the "Company"), certify that:

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))   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) | 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                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                 
|(c) | 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                                                                                  

1. 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 14, 2003 |  | /s/ Barry W. Perry
|      |                 |  | Barry W. Perry    
|      |                 |  | Chairman and Chief
|      |                 |  | Executive Officer 
|      |                 |  |                   

EXHIBIT (31)(b)

# Rule 13a-14(a)/15d-14(a)Certification of Chief Financial Officer

I, Michael A. Sperduto, Vice President and Chief Financial Officer
of Engelhard Corporation (the "Company"), certify that:

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))   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) | 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                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                 
|(c) | 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                                                                                  

1. 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 14, 2003 |  | /s/ Michael A. Sperduto 
|      |                 |  | Michael A. Sperduto     
|      |                 |  | Vice President and Chief
|      |                 |  | Financial Officer       
|      |                 |  |                         

EXHIBIT (32)

# Section 1350 Certifications of Chief Executive Officer and Chief Financial Officer

The undersigned, Barry W. Perry, Chairman and Chief Executive Officer of
Engelhard Corporation (the "Company"), and Michael A. Sperduto, Vice President
and Chief Financial Officer of the Company, each hereby certifies that the
Quarterly Report of the Company on Form 10-Q for the period ended June 30, 2003
(the "Report") (1) fully complies with the requirements of Section 13(a) of the
Securities Exchange Act of 1934 and (2) the information contained in the Report
fairly presents, in all material respects, the financial condition and the
results of operations of the Company.

|      |                 |  |                         
|----- | --------------- |  | ------------------------
|      |                 |  |                         
|      |                 |  |                         
|      |                 |  |                         
|      |                 |  |                         
|Date: | August 14, 2003 |  | /s/ Barry W. Perry      
|      |                 |  | Barry W. Perry          
|      |                 |  | Chairman and Chief      
|      |                 |  | Executive Officer       
|      |                 |  |                         
|      |                 |  |                         
|      |                 |  |                         
|      |                 |  |                         
|      |                 |  |                         
|Date: | August 14, 2003 |  | /s/ Michael A. Sperduto 
|      |                 |  | Michael A. Sperduto     
|      |                 |  | Vice President and Chief
|      |                 |  | Financial Officer       

This certification accompanies this Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not be deemed filed by the Company
for purposes of Section 18 or any other provision of the Securities
Exchange Act of 1934, as amended.

A signed original of this written  statement  required by Section 906 or
other document authenticating, acknowledging or otherwise adopting the signature
that  appears  in typed  form  within the  electronic  version  of this  written
statement  required by Section 906, has been provided to the Company and will be
retained by the Company and furnished to the Securities and Exchange  Commission
or its staff upon request.