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 September 29, 2002

                                      OR

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

                      Commission File Number 333-17827-01

                                ISP CHEMCO INC.
            (Exact name of registrant as specified in its charter)


        Delaware                                         51-0382622
(State of Incorporation)                              (I.R.S. Employer
                                                     Identification No.)

 300 Delaware Avenue, Suite 303, Wilmington, Delaware            19801
(Address of principal executive offices)                      (Zip Code)

Registrant's telephone number, including area code          (302) 427-5818

                      ___________________________________
                      See Table of Additional Registrants

     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 / /

     As of November  12, 2002,  100 shares of ISP Chemco Inc.  common stock (par
value  $.01 per share)  were  outstanding.  There is no  trading  market for the
common stock of the registrant.  As of November 12, 2002, each of the additional
registrants  had the  number of shares  outstanding  which is shown on the table
below.  There is no  trading  market  for the  common  stock  of the  additional
registrants. No shares of the registrant or the additional registrants were held
by non-affiliates.

     THE REGISTRANT AND THE ADDITIONAL REGISTRANTS MEET THE CONDITIONS SET FORTH
IN GENERAL  INSTRUCTION  H(1)(a) AND (b) OF FORM 10-Q AND ARE  THEREFORE  FILING
THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
<PAGE>
<TABLE>
<CAPTION>


                            ADDITIONAL REGISTRANTS
                                                                                                  Address, including zip
                                                                            Commission File       code and telephone
Exact name of registrant as     State or other               No. of         No./ I.R.S.           number, including area
specified in its charter        jurisdiction of              Shares         Employer              code, of registrant's
                                incorporation or             Outstanding    Identification No.    principal executive
                                organization                                                      offices
---------------------------     ----------------             -----------    ------------------    -----------------------
<S>                             <C>                          <C>            <C>                   <C>
ISP Chemicals Inc.              Delaware                     10             333-70144-08/         Route 95 Industrial Area,
                                                                            22-3807357            P.O. Box 37
                                                                                                  Calvert City, KY 42029
                                                                                                  (270) 395-4165
ISP Minerals Inc.               Delaware                     10             333-70144-07/         34 Charles Street
                                                                            22-3807370            Hagerstown, MD 21740
                                                                                                  (301) 733-4000
ISP Technologies                Delaware                     10             333-70144-09/         4501 Attwater Avenue
Inc.                                                                        22-3807372            and State Highway 146
                                                                                                  Texas City, TX 77590
                                                                                                  (409) 945-3411
ISP  Management                 Delaware                     10             333-70144-13/         1361 Alps Road
  Company, Inc.                                                             22-3807364            Wayne, NJ  07470
                                                                                                  (973) 628-4000
Bluehall Incorporated           Delaware                      1             033-44862-15/         c/o ISP Management
                                                                            13-3335905            Company, Inc.
                                                                                                  1361 Alps Road
                                                                                                  Wayne, NJ 07470
                                                                                                  (973) 628-4000
Verona Inc.                     Delaware                     100            033-44862-16/         1361 Alps Road
                                                                            22-3036319            Wayne, NJ  07470
                                                                                                  (973) 628-4000
ISP Real Estate Company,        Delaware                     2              033-44862-12/         1361 Alps Road
    Inc.                                                                    22-2886551            Wayne, NJ  07470
                                                                                                  (973) 628-4000
ISP Freetown Fine               Delaware                     10             033-70144-12/         238 South Main Street
  Chemicals Inc.                                                            52-2069636            Assonet, MA  02702
                                                                                                  (508) 672-0634
ISP International Corp.         Delaware                     10             033-44862-07/         300 Delaware Avenue
                                                                            51-0333734            Suite 303
                                                                                                  Wilmington, Delaware
                                                                                                  19801
                                                                                                  (302) 427-5715
ISP (Puerto Rico) Inc.          Delaware                     10             033-44862-03/         Mirador de Bairoa
                                                                            22-2934561            Calle 27 ST-14
                                                                                                  HC01 Box 29030
                                                                                                  PMB 15
                                                                                                  Caguas, PR 00725-8900
                                                                                                  (787) 744-3188
ISP Alginates Inc.              Delaware                     10             333-70144-11/         2145 East Belt Street
                                                                            22-3676745            San Diego, CA 92113
                                                                                                  (619) 557-3100
ISP Environmental               Delaware                     10             033-44862-04/         1361 Alps Road
  Services Inc.                                                             51-0333801            Wayne, NJ  07470
                                                                                                  (973) 628-4000
ISP Global                      Delaware                     10             333-70144-10/         300 Delaware Avenue
  Technologies Inc.                                                         22-3807358            Suite 303
                                                                                                  Wilmington, Delaware
                                                                                                  19801
                                                                                                  (302) 427-5852
ISP Investments Inc.            Delaware                     10             033-44862-08/         300 Delaware Avenue
                                                                            22-3807361            Suite 303
                                                                                                  Wilmington, Delaware
                                                                                                  19801
                                                                                                  (302) 427-5822
ISP Chemicals LLC               Delaware                     N/A            333-70144-04/         Route 95 Industrial Area
                                                                            22-3807378            P.O. Box 37
                                                                                                  Calvert City, Kentucky
                                                                                                  42029
                                                                                                  (270) 395-4165
</TABLE>


<PAGE>
<TABLE>
<CAPTION>

                                                        ADDITIONAL REGISTRANTS
                                                                                                   Address, including zip
                                                                            Commission File No./   code and telephone
Exact name of registrant as     State or other               No. of         I.R.S. Employer        number, including area
specified in its charter        jurisdiction of              Shares         Identification No.     code, of registrant's
                                incorporation or             Outstanding                           principal executive
                                organization                                                       offices
---------------------------     ----------------             -----------    --------------------   -------------------------------
<S>                             <C>                          <C>            <C>                    <C>
ISP Management LLC              Delaware                     N/A            333-70144-05/          1361 Alps Road
                                                                            22-3807385             Wayne, NJ  07470
                                                                                                   (973) 628-4000
ISP Minerals LLC                Delaware                     N/A            333-70144-01/          34 Charles Street
                                                                            22-3807387             Hagerstown, MD 21740
                                                                                                   (301) 733-4000
ISP Technologies                Delaware                     N/A            333-70144-06/          4501 Attwater Avenue and
   LLC                                                                      22-3807390             State Highway 146
                                                                                                   Texas City, TX 77590
                                                                                                   (409) 945-3411
ISP Investments                 Delaware                     N/A            333-70144-03/          300 Delaware Avenue
   LLC                                                                      22-3807381             Suite 303
                                                                                                   Wilmington, DE 19801
                                                                                                   (302) 427-5822
ISP Global                      Delaware                     N/A            333-70144-02/          300 Delaware Avenue
   Technologies                                                             22-3807380             Suite 303
LLC                                                                                                Wilmington, DE 19801
                                                                                                   (302) 427-5852
</TABLE>



<PAGE>



                        PART I - FINANCIAL INFORMATION
                         ITEM 1 - FINANCIAL STATEMENTS


                                ISP CHEMCO INC.

                 CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>


                                      Third Quarter Ended   Nine Months Ended
                                      --------------------  ------------------
                                      Sept. 30,  Sept. 29,  Sept. 30, Sept. 29,
                                        2001       2002       2001      2002
                                      --------   ---------  --------  --------
                                                  (Thousands)
<S>                                   <C>         <C>        <C>        <C>
Net sales............................ $ 188,633   $ 208,363  $ 595,124  $ 642,211
                                      ---------   ---------  ---------  ---------
Costs and Expenses:
  Cost of products sold..............  (114,896)   (132,105)  (370,491)  (416,137)
  Selling, general and administrative   (39,137)    (40,566)  (120,191)  (126,848)
  Gain on sale of assets.............         -           -          -      5,468
  Gains on settlement of contracts...         -           -          -      6,760
  Amortization of goodwill and
    intangibles......................    (4,010)       (125)   (12,031)      (680)
                                      ---------   ---------  ---------  ---------
     Total costs and expenses .......  (158,043)   (172,796)  (502,713)  (531,437)
                                      ---------   ---------  ---------  ---------
Operating income.....................    30,590      35,567     92,411    110,774
Interest expense.....................   (20,326)    (14,050)   (54,573)   (45,847)
Investment income, net of
  investment-related expenses of
  $2,560.............................         -           -     27,618          -
Other expense, net...................    (1,079)     (4,245)   (10,078)    (6,201)
                                      ---------   ---------  ---------  ---------
Income before income taxes...........     9,185      17,272     55,378     58,726
Income taxes.........................    (3,232)     (6,407)   (19,449)   (20,688)
                                      ---------   ---------  ---------  ---------
Income before extraordinary item and
   cumulative effect of accounting
   change............................     5,953      10,865     35,929     38,038

Extraordinary item - loss on early
  retirement of debt, net of income
  tax benefit of $1,460..............         -           -          -     (2,834)

Cumulative effect of change in
  accounting principle, net of
  income tax benefit of $216 in 2001.         -           -       (440)  (155,400)
                                      ---------   ---------  ---------  ---------
Net income (loss).................... $   5,953   $  10,865  $  35,489  $(120,196)
                                      =========   =========  =========  =========
</TABLE>

           The accompanying Notes to Consolidated Financial Statements are an
                             integral part of these statements.


                                       1
<PAGE>



                                ISP CHEMCO INC.

                          CONSOLIDATED BALANCE SHEETS

                                                                Sept. 29,
                                                  December 31,    2002
                                                      2001     (Unaudited)
                                                  ------------ -----------
                                                         (Thousands)
ASSETS
Current Assets:
  Cash and cash equivalents...................... $   10,830   $    9,011
  Restricted cash................................    182,130            -
  Accounts receivable, trade, net................     86,611       90,861
  Accounts receivable, other.....................     21,171       23,190
  Income taxes receivable........................      5,743            -
  Receivable from related parties, net...........     11,599       15,580
  Inventories....................................    190,582      177,584
  Deferred income tax benefits...................     32,929       36,844
  Other current assets...........................      8,624       10,016
                                                  ----------   ----------
    Total Current Assets.........................    550,219      363,086
Property, plant and equipment, net...............    556,725      559,353
Goodwill, net....................................    497,402      325,706
Long-term receivable from related party..........     28,583       29,869
Intangible assets, net...........................     15,167        8,385
Other assets.....................................     56,627       57,855
                                                  ----------   ----------
Total Assets..................................... $1,704,723   $1,344,254
                                                  ==========   ==========


LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
  Short-term debt................................ $      143   $      158
  Current maturities of long-term debt...........    184,500        2,609
  Accounts payable...............................     43,719       58,311
  Accrued liabilities............................     93,895       81,015
  Income taxes...................................          -       10,388
                                                  ----------   ----------
    Total Current Liabilities....................    322,257      152,481
                                                  ----------   ----------
Long-term debt less current maturities...........    719,557      634,332
                                                  ----------   ----------
Deferred income taxes............................    164,103      166,655
                                                  ----------   ----------
Other liabilities................................     72,682       66,850
                                                  ----------   ----------
Shareholder's Equity:
   Common stock, $.01 par value per share;
    1,000 shares authorized; 100 shares issued
    and outstanding .............................          -            -
  Additional paid-in capital.....................    390,989      398,023
  Retained earnings (accumulated deficit)........     67,164      (53,032)
  Accumulated other comprehensive loss...........    (32,029)     (21,055)
                                                  ----------   ----------
    Total Shareholder's Equity...................    426,124      323,936
                                                  ----------   ----------
Total Liabilities and Shareholder's Equity....... $1,704,723   $1,344,254
                                                  ==========   ==========



     The accompanying Notes to Consolidated Financial Statements are an
                         integral part of these statements.


                                       2

<PAGE>

                                ISP CHEMCO INC.
               CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                                            Nine Months Ended
                                                           -------------------
                                                           Sept. 30,  Sept. 29,
                                                             2001       2002
                                                           --------  ---------
                                                               (Thousands)
Cash and cash equivalents, beginning of period...........  $ 14,763  $ 10,830
                                                           --------  --------
Cash provided by (used in) operating activities:
  Net income (loss)......................................    35,489  (120,196)
  Adjustments to reconcile net income (loss) to net cash
    provided by operating activities:
      Extraordinary item.................................         -     2,834
      Cumulative effect of change in accounting principle       440   155,400
      Gain on sale of assets.............................         -    (5,468)
      Depreciation.......................................    39,243    42,127
      Amortization of goodwill and intangibles...........    12,031       680
      Deferred income taxes..............................   (11,482)    7,574
      Unrealized losses on trading securities and other
        short-term investments...........................     1,039        -
  (Increase) decrease in working capital items...........   (39,548)    9,093
  Purchases of trading securities........................  (217,335)        -
  Proceeds from sales of trading securities..............   376,292         -
  Proceeds (repayments) from sale of accounts receivable.    (7,791)    3,932
  (Increase) decrease in receivable from related parties.        51    (5,111)
  Change in cumulative translation adjustment............      (765)    9,374
  Other, net.............................................     1,756    (5,524)
                                                           --------  --------
Net cash provided by operating activities................   189,420    94,715
                                                           --------  --------
Cash provided by (used in) investing activities:
  Capital expenditures and acquisitions..................   (58,716)  (42,471)
  Net proceeds from sale of assets.......................         -    27,271
  Purchases of available-for-sale securities.............  (121,299)        -
  Proceeds from sales of available-for-sale securities...    19,700         -
  Proceeds from sales of other short-term investments....    12,529         -
                                                           --------  --------
Net cash used in investing activities....................  (147,786)  (15,200)
                                                           --------  --------
Cash provided by (used in) financing activities:
  Increase (decrease) in short-term debt.................  (108,542)       15
  Proceeds from issuance of debt.........................   526,364         -
  Decrease in borrowings under revolving credit facility.  (115,400)  (85,250)
  Repayments of long-term debt...........................   (65,059) (182,202)
  Borrowings from parent company.........................    28,915         -
  Call premium on redemption of debt.....................         -    (2,734)
  (Increase) decrease in restricted cash.................  (257,649)  182,130
  Financing fees and expenses............................   (13,789)     (820)
  Effect of Restructuring - transfer to ISP Investco LLC.   (22,220)        -
  Dividends and distributions to parent company..........   (35,000)        -
  Capital contribution from parent company...............    20,116     6,891
                                                           --------  --------
Net cash used in financing activities....................   (42,264)  (81,970)
                                                           --------  --------
Effect of exchange rate changes on cash..................      (219)      636
                                                           --------  --------
Net change in cash and cash equivalents..................      (849)   (1,819)
                                                           --------  --------
Cash and cash equivalents, end of period.................  $ 13,914  $  9,011
                                                           ========  ========


                                       3
<PAGE>

                                ISP CHEMCO INC.

        CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) -- (CONTINUED)


                                                        Nine Months Ended
                                                       -------------------
                                                       Sept. 30,  Sept. 29,
                                                         2001       2002
                                                       --------- ---------
                                                           (Thousands)

Supplemental Cash Flow Information:
  Cash paid during the period for:
    Interest (net of amount capitalized).............   $ 42,517  $ 57,918
    Income taxes (including taxes paid pursuant to
       the Tax Sharing Agreement)....................     28,685     5,278


Acquisition of FineTech Ltd.:
    Fair market value of assets acquired.............   $ 26,547
    Purchase price of acquisition....................     22,450
                                                        --------
    Liabilities assumed..............................   $  4,097
                                                        ========

Acquisition of mineral products facility:
    Fair market value of assets acquired.............             $ 11,421
    Purchase price of acquisition....................               11,421
                                                                  --------
    Liabilities assumed..............................             $      -
                                                                  ========


















    The accompanying Notes to Consolidated Financial Statements are an
                            integral part of these statements.



                                       4

<PAGE>


                                ISP CHEMCO INC.

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


     The consolidated  financial  statements for ISP Chemco Inc. (the "Company")
reflect,  in the opinion of  management,  all  adjustments  necessary to present
fairly the financial  position of the Company and its consolidated  subsidiaries
at September  29,  2002,  and the results of  operations  and cash flows for the
third  quarter and nine months ended  September 30, 2001 and September 29, 2002.
All adjustments are of a normal recurring nature.  These consolidated  financial
statements should be read in conjunction with the annual consolidated  financial
statements  and notes thereto  included in the  Company's  Annual Report on Form
10-K for the fiscal year ended December 31, 2001 (the "Form 10-K").


NOTE 1.  RETIREMENT OF DEBT

     On January 14, 2002, the Company's  indirect parent company,  International
Specialty Products Inc. ("ISP"), redeemed the remaining $307.9 million aggregate
principal  amount of its 9% Senior Notes due 2003 (the "2003  Notes"),  of which
$182.1  million was  reflected on the  Company's  Consolidated  Balance Sheet at
December 31, 2001. The 2003 Notes were redeemed at a redemption  price of 101.5%
of the principal amount plus accrued and unpaid interest to the redemption date.
As a result,  the Company recorded an extraordinary loss on the early retirement
of debt of  $2.8  million  ($4.3  million  before  income  tax  benefit  of $1.5
million).  The  extraordinary  charge  was  comprised  of $2.7  million  of call
premium,  $0.2 million of remaining  discount  amortization and the write-off of
$1.4 million of unamortized  deferred  financing fees. The redemption was funded
utilizing a restricted cash escrow account which had been established in 2001 in
connection with the issuances of long-term debt.


NOTE 2.  RECENT ACCOUNTING DEVELOPMENT

     On June 30,  2001,  the FASB  issued  SFAS No.  142,  "Goodwill  and  Other
Intangible  Assets".  With the  adoption of SFAS No. 142,  goodwill is no longer
subject to amortization over its estimated useful life.  However,  goodwill will
be subject to at least an annual  assessment for impairment and more  frequently
if  circumstances  indicate  a possible  impairment.  Companies  must  perform a
fair-value-based  goodwill impairment test. In addition,  under SFAS No. 142, an
acquired intangible asset should be separately  recognized if the benefit of the
intangible is obtained  through  contractual  or other legal  rights,  or if the
intangible  asset can be sold,  transferred,  licensed,  rented,  or  exchanged.
Intangible assets will be amortized over their useful lives. The Company adopted
SFAS No. 142 effective as of January 1, 2002. Accordingly, the Company completed
a  transitional  impairment  test,  effective  January 1, 2002, and recognized a
goodwill  impairment loss of $155.4 million as the cumulative effect of a change
in accounting  principle.  The Statement of Operations  for the first quarter of
2002 has been  restated  to reflect  this loss.  The  write-off  represents  the
goodwill associated with the Company's Performance Chemicals, Fine Chemicals and
Industrial  business  segment and was based upon the Company's  estimate of fair
value  for  these  businesses,   considering  expected  future  cash  flows  and
profitability. The Company intends to complete its annual test for impairment by
the end of the year 2002.

     Following is a reconciliation showing "Income before extraordinary item and
cumulative effect of accounting change" and "Net income (loss)," as reported for
the third  quarters and nine months ended  September  30, 2001 and September 29,
2002, and as adjusted to exclude amortization of goodwill.

                                       5

<PAGE>


                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)

NOTE 2.  RECENT ACCOUNTING DEVELOPMENT - (Continued)

                                       Third Quarter Ended   Nine Months Ended
                                       --------------------  ------------------
                                       Sept. 30,  Sept. 29,  Sept. 30, Sept. 29,
                                         2001       2002       2001      2002
                                       --------  ---------   --------  --------
                                                      (Thousands)
Income before extraordinary item
  and cumulative effect of
  accounting change, as reported..... $   5,953  $  10,865  $ 35,929  $  38,038
Add back: goodwill amortization......     4,010          -    12,031          -
                                      ---------  ---------  --------  ---------
Income before extraordinary item and
  cumulative effect of accounting
  change, as adjusted................ $   9,963  $  10,865  $ 47,960  $  38,038
                                      =========  =========  ========  =========

Net income (loss), as reported....... $   5,953  $  10,865  $ 35,489  $(120,196)
Add back: goodwill amortization......     4,010          -    12,031          -
                                      ---------  ---------  --------  ---------

Net income (loss), as adjusted....... $   9,963  $  10,865  $ 47,520  $(120,196)
                                      =========  =========  ========  =========


NOTE 3.  GAIN ON SALE OF ASSETS

     In April 2002,  the Company  sold its Haifa,  Israel-based  FineTech,  Ltd.
business to Pharmaceutical  Resources, Inc. ("PRI") for $32 million. The Company
recorded a second quarter pre-tax gain, after expenses,  of $5.5 million related
to this transaction. Also see Note 4.


NOTE 4.  GAINS ON SETTLEMENT OF CONTRACTS

     In  December  2001,  ISP  entered  into a  letter  agreement  to  sell  its
pharmaceutical  fine  chemicals  business,  including  its  Haifa,  Israel-based
FineTech Ltd. business and its Columbus,  Ohio manufacturing facility to PRI. In
February 2002, the Company received a $250,000 payment from PRI in consideration
of extending the negotiations  pursuant to the letter agreement.  In March 2002,
the Company  announced that the sale would not be consummated due to the failure
of PRI to proceed with the  transaction in a timely  manner.  Under the terms of
the  letter  agreement,  the  Company  received  a $3.0  million  break-up  fee.
Accordingly,  the Company  recognized a first  quarter 2002 pre-tax gain of $2.8
million,  representing  the total cash  received in February  and March of $3.25
million less related expenses of $0.4 million.

     In the  second  quarter  of 2002,  the  Company  received  $4.0  million in
settlement of a  manufacturing  and supply  contract with a customer of the Fine
Chemicals business.  After related expenses,  a pre-tax gain of $3.9 million was
recognized.



                                       6

<PAGE>


                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)



NOTE 5.  ACQUISITION

     In April 2002,  the Company  acquired  the roofing  granules  manufacturing
operations  in  Ione,   California  of  Reed  Minerals,  a  division  of  Harsco
Corporation.  In a related  transaction,  the Company also acquired the adjacent
quarry operations and certain mining assets from Hanson Aggregates  Mid-Pacific,
Inc. The total purchase price of the acquisitions was $11.4 million.


NOTE 6.  COMPREHENSIVE INCOME (LOSS)
<TABLE>
<CAPTION>

                                                Third Quarter Ended    Nine Months Ended
                                                --------------------  -------------------
                                                Sept. 30,  Sept. 29,  Sept. 30,  Sept. 29,
                                                  2001       2002       2001       2002
                                                -------    --------   --------  ---------
                                                                (Thousands)
<S>                                             <C>        <C>        <C>       <C>
Net income (loss)............................   $  5,953   $ 10,865   $ 35,489  $(120,196)
                                                --------   --------   --------  ---------
Other comprehensive income (loss), net of tax:
  Change in unrealized losses on
    available-for-sale securities:
  Unrealized holding losses arising during
    the period, net of income tax benefit
    of $39,099................................         -          -    (74,884)         -
  Less: reclassification adjustment for
    losses included in net income, net of
    income tax benefit of $311................         -          -       (574)         -
  Effect of Corporate Restructuring in 2001...         -          -     40,290          -
                                                --------   --------   --------  ---------
  Total change for the period.................         -          -    (34,020)         -
                                                --------   --------   --------  ---------
  Change in unrealized losses on derivative
    hedging instruments - cash flow hedges:
  Net derivative losses, net of income tax
    benefit of $443, $0, $1,070 and $12,
    respectively..............................      (819)         -     (1,979)       (22)
  Less: reclassification adjustment for
    losses included in net income, net of
    income tax benefit of $151, $0, $341
    and $534, respectively....................      (280)         -       (630)      (986)
                                                --------   --------   --------  ---------
  Total change for the period.................      (539)         -     (1,349)       964
                                                --------   --------   --------  ---------
Foreign currency translation adjustment.......     7,992     (1,128)      (984)    10,010
Effect of Corporate Restructuring in 2001.....         -          -     (3,364)         -
                                                --------   --------   --------  ---------
  Net translation adjustment for the period...     7,992     (1,128)    (4,348)    10,010
                                                --------   --------   --------  ---------
Total other comprehensive income (loss).......     7,453     (1,128)   (39,717)    10,974
                                                --------  ---------   --------  ---------
Comprehensive income (loss)...................  $ 13,406  $   9,737   $ (4,228) $(109,222)
                                                ========  =========   ========  =========

</TABLE>
                                       7

<PAGE>
                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 6.  COMPREHENSIVE INCOME (LOSS) - (CONTINUED)

     Changes in the components of "Accumulated other comprehensive loss" for the
nine months ended September 29, 2002 are as follows:

                                    Unrealized   Cumulative
                                    Losses on    Foreign      Accumulated
                                    Derivative   Currency     Other
                                    Hedging      Translation  Comprehensive
                                    Instruments  Adjustment   Loss
                                    ----------   ---------- -----------
                                         (Thousands)
Balance, December 31, 2001.......   $     (964)  $ (31,065)   $ (32,029)
Change for the period............          964      10,010       10,974
                                    ----------   ---------    ---------
Balance, September 29, 2002......   $        -   $ (21,055)   $ (21,055)
                                    ==========   =========    =========


NOTE 7.  BUSINESS SEGMENT INFORMATION
<TABLE>
<CAPTION>

                                                Third Quarter Ended     Nine Months Ended
                                               ---------------------   --------------------
                                               Sept. 30,   Sept. 29,    Sept. 30, Sept. 29,
                                                  2001        2002         2001      2002
                                               ---------   ---------    --------  ---------
                                                               (Thousands)
<S>                                            <C>         <C>          <C>        <C>
Net sales (1):
  Personal Care.............................   $  45,487   $  51,047    $ 150,599  $ 156,164
  Pharmaceutical, Food and Beverage.........      57,846      62,269      169,645    181,039
  Performance Chemicals, Fine Chemicals and
    Industrial..............................      61,510      70,493      211,068    230,751
                                               ---------   ---------    ---------  ---------
    Total Specialty Chemicals...............     164,843     183,809      531,312    567,954
  Mineral Products (2)......................      23,790      24,554       63,812     74,257
                                               ---------   ---------    ---------  ---------
Net sales...................................   $ 188,633   $ 208,363    $ 595,124  $ 642,211
                                               =========   =========    =========  =========

Operating income(1):
  Personal Care.............................   $   5,743   $  10,008    $  27,026  $  28,101
  Pharmaceutical, Food and Beverage.........      12,430      16,990       39,354     43,429
  Performance Chemicals, Fine Chemicals and
    Industrial (3)..........................       7,322       2,959       16,907     20,776
                                               ---------   ---------    ---------   --------
    Total Specialty Chemicals...............      25,495      29,957       83,287     92,306
  Mineral Products..........................       5,078       5,540        8,434     18,428
                                               ---------   ---------    ---------   --------
  Total segment operating income............      30,573      35,497       91,721    110,734
  Unallocated corporate office..............          17          70          690         40
                                               ---------   ---------    ---------  ---------
Total operating income......................      30,590      35,567       92,411    110,774
Interest expense, investment income
  and other expense, net....................     (21,405)    (18,295)     (37,033)   (52,048)
                                               ---------   ---------    ---------  ---------
Income before income taxes..................   $   9,185   $  17,272    $  55,378  $  58,726
                                               =========   =========    =========  =========

</TABLE>

   (1) Net sales and operating income for the third quarter and the first nine
       months of 2001 for the three  Specialty  Chemicals  business  segments
       have been restated to conform to the 2002 presentation. In 2002, the
       Company realigned its Alginates  business  based on the markets for its
       products.  Sales and operating income  for the  Alginates  business  are
       now  included  in the  Personal  Care, Pharmaceutical,

                                       8

<PAGE>
                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 7.  BUSINESS SEGMENT INFORMATION - (CONTINUED)

     Food and Performance Chemicals businesses. Prior to 2001, the sales and
     operating income of the Alginates business represented the Food business
     of the Pharmaceutical, Food and Beverage business segment.

 (2) Includes sales to Building Materials Corporation of America, an affiliate,
     and its subsidiaries, of $18.7 and $19.1 million for the third quarter of
     2001 and 2002, respectively, and $50.5 and $57.9 million for the first
     nine months of 2001 and 2002, respectively.

 (3) Operating income for the Performance Chemicals, Fine Chemicals and
     Industrial business segment for the first nine months of 2002 includes a
     gain of $5.5 million from the sale of the FineTech business (see Note 3)
     and a $3.9 million gain from the settlement of a manufacturing and supply
     contract (see Note 4). For the first nine months of 2002, operating income
     for the Performance Chemicals, Fine Chemicals and Industrial business
     segment also includes a gain of $2.8 million from the termination of a
     contract related to the sale of the FineTech business (see Note 4).


NOTE 8.  HEDGING AND DERIVATIVES

     In June 2001,  the Company  entered  into $450.0  million of Senior  Credit
Facilities,  which include a $225.0  million term loan.  The Company  designated
interest rate swaps,  with a notional amount of $100 million,  as a hedge of its
exposure to changes in the  eurodollar  rate under the term loan.  The  interest
rate swaps are structured to receive  interest based on the eurodollar  rate and
pay  interest  on a fixed  rate  basis.  A cash flow  hedging  relationship  was
established  whereby the  interest  rate swaps hedged the risk of changes in the
eurodollar  rate related to borrowings  against the term loan through July 2002.
These  swaps  matured in June and July of 2002.  During the first nine months of
2002,  $1.9 million  related to the  interest  rate swaps was  reclassified  and
charged against interest expense.


















                                       9

<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 9.  INVENTORIES

     Inventories comprise the following:

                                       December 31,   September 29,
                                           2001            2002
                                       ------------   -------------
                                              (Thousands)
     Finished goods................     $120,797         $110,739
     Work-in-process...............       36,960           31,943
     Raw materials and supplies....       32,825           34,902
                                        --------         --------
     Inventories...................     $190,582         $177,584
                                        ========         ========

     At December  31, 2001 and  September  29,  2002,  $60.1 and $61.6  million,
respectively,  of domestic inventories were valued using the LIFO method. If the
FIFO  inventory  method  had  been  used for  these  inventories,  the  value of
inventories  would have been $3.7 and $2.1  million  higher at December 31, 2001
and September 29, 2002, respectively.


NOTE 10. GUARANTOR FINANCIAL INFORMATION

     In June 2001, the Company and three of its wholly owned subsidiaries issued
$205.0 million aggregate  principal amount of 10 1/4% Senior  Subordinated Notes
due 2011 (the "2011 Notes") in a private placement. On each of July 31, 2001 and
November 13, 2001, the Company and its three  subsidiaries  issued an additional
$100.0  million of the 2011 Notes.  The 2011 Notes are  guaranteed by all of the
Company's   other   domestic   subsidiaries,   other  than  certain   immaterial
subsidiaries and the Company's accounts receivable financing  subsidiary.  These
guarantees are full, unconditional and joint and several.

     ISP Global  Technologies  Inc., which is a guarantor of these senior notes,
is  party  to  a  License  and  Royalty  Agreement  with  non-guarantor  foreign
affiliates.  Under this agreement,  the non-guarantor affiliates have been given
license for the use of the Patent Rights,  Know-how and Trademarks in connection
with the manufacture, use and sale of the Company's products.

     Presented below is condensed  consolidating  financial  information for the
Company,  the guarantor  subsidiaries and the non-guarantor  subsidiaries.  This
financial  information  should  be read in  conjunction  with  the  Consolidated
Financial  Statements  and  other  notes  related  thereto.  Separate  financial
information for the guarantor subsidiaries and non-guarantor subsidiaries is not
included herein because  management has determined that such  information is not
material to investors.





                                       10

<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 10. GUARANTOR FINANCIAL INFORMATION - (CONTINUED)
<TABLE>
<CAPTION>

                                ISP CHEMCO INC.
                  CONDENSED CONSOLIDATING STATEMENT OF INCOME
                     THIRD QUARTER ENDED SEPTEMBER 30, 2001
                                  (Thousands)

                                                                                           Non-
                                                       Parent         Guarantor         Guarantor
                                                      Company         Subsidiaries    Subsidiaries     Eliminations    Consolidated
                                                      -------         ------------    ------------     ------------    ------------
<S>                                                    <C>            <C>             <C>              <C>             <C>
Net sales ................................             $      -       $   93,847      $   94,786       $        -      $   188,633
Intercompany net sales ...................                    -           50,549           8,314          (58,863)               -
                                                       --------       ----------      ----------       ----------      -----------
   Total net sales .......................                    -          144,396         103,100          (58,863)         188,633
                                                       --------       ----------      ----------       ----------      -----------
Costs and Expenses:
   Cost of products sold .................                    -          (99,076)        (74,683)          58,863         (114,896)
   Selling, general and administrative ...                 (302)         (26,929)        (11,906)                          (39,137)
   Goodwill amortization .................                 (908)          (3,102)              -                            (4,010)
                                                       --------       ----------       ---------        ---------       ----------
      Total costs and expenses ...........               (1,210)        (129,107)        (86,589)          58,863         (158,043)
                                                       --------       ----------       ---------        ---------       ----------
Operating income .........................               (1,210)          15,289          16,511                -           30,590
Equity in income of subsidiaries .........               19,570                -               -          (19,570)               -
Intercompany royalty income (expense) net                     -            6,569          (6,569)                                -
Intercompany dividend income .............                    -            3,571               -           (3,571)               -
Interest expense .........................              (12,722)          (6,999)           (605)                          (20,326)
Other expense, net .......................                 (181)            (651)           (247)                           (1,079)
                                                       --------        ---------        --------         --------      -----------
Income before income taxes ...............                5,457           17,779           9,090          (23,141)           9,185
Income tax (provision) benefit ...........                4,067           (5,622)         (1,677)                           (3,232)
                                                       --------       ----------      ----------       ----------      -----------
Net income ...............................             $  9,524       $   12,157      $    7,413       $  (23,141)     $     5,953
                                                       ========       ==========      ==========       ==========      ===========


                                ISP CHEMCO INC.
                  CONDENSED CONSOLIDATING STATEMENT OF INCOME
                     THIRD QUARTER ENDED SEPTEMBER 29, 2002
                                  (Thousands)

                                                                                          Non-
                                                         Parent         Guarantor      Guarantor
                                                        Company       Subsidiaries    Subsidiaries     Eliminations    Consolidated
                                                       --------       ------------    ------------     ------------    ------------

Net sales ................................             $      -       $  108,305      $  100,058       $        -      $  208,363
Intercompany net sales ...................                    -           50,815           2,704          (53,519)              -
                                                       --------       ----------      ----------       ----------      ----------
   Total net sales .......................                    -          159,120         102,762          (53,519)        208,363
                                                       --------       ----------      ----------       ----------      ----------
Costs and Expenses:
   Cost of products sold .................                    -         (111,557)        (74,067)          53,519        (132,105)
   Selling, general and administrative ...                    -          (29,367)        (11,199)                         (40,566)
   Amortization of intangibles ...........                    -             (150)             25                             (125)
                                                       --------        ---------      ----------       ----------      ----------
     Total costs and expenses ............                    -         (141,074)        (85,241)          53,519        (172,796)
                                                       --------        ---------      ----------       ----------      ----------
Operating income .........................                    -           18,046          17,521                -          35,567
Equity in income of subsidiaries .........               15,119                -               -          (15,119)              -
Intercompany royalty income (expense), net                    -            7,356          (7,356)                               -
Intercompany dividend income .............                    -            4,408               -           (4,408)              -
Interest expense .........................                  919          (15,994)          1,025                          (14,050)
Other expense, net .......................                 (682)          (1,381)         (2,182)                          (4,245)
                                                       --------        ---------       ---------        ---------       ---------
Income before income taxes ...............               15,356           12,435           9,008          (19,527)         17,272
Income tax (provision) benefit ...........                  (83)          (6,522)            198                           (6,407)
                                                       --------       ----------      ----------       ----------      ----------
Net income ...............................             $ 15,273       $    5,913      $    9,206       $  (19,527)     $   10,865
                                                       ========       ==========      ==========       ==========      ==========

</TABLE>
                                       11

<PAGE>


                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 10. GUARANTOR FINANCIAL INFORMATION - (CONTINUED)
<TABLE>
<CAPTION>

                                ISP CHEMCO INC.
                  CONDENSED CONSOLIDATING STATEMENT OF INCOME
                      NINE MONTHS ENDED SEPTEMBER 30, 2001
                                  (Thousands)

                                                                                          Non-
                                                        Parent         Guarantor      Guarantor
                                                       Company        Subsidiaries    Subsidiaries     Eliminations    Consolidated
                                                       --------       -------------   ------------     ------------    ------------
<S>                                                    <C>            <C>             <C>              <C>             <C>
Net sales ................................             $      -       $  298,567      $  296,557       $        -      $   595,124
Intercompany net sales ...................                    -          153,690          21,877         (175,567)               -
                                                       --------       ----------      ----------       ----------      -----------
   Total net sales .......................                    -          452,257         318,434         (175,567)         595,124
                                                       --------       ----------      ----------       ----------      -----------
Costs and Expenses:
   Cost of products sold .................                    -         (316,264)       (229,794)         175,567         (370,491)
   Selling, general and administrative ...               (2,731)         (79,590)        (37,870)                         (120,191)
   Goodwill amortization .................               (2,723)          (9,308)              -                           (12,031)
                                                       --------       ----------      ----------       ----------      -----------
      Total costs and expenses ...........               (5,454)        (405,162)       (267,664)         175,567         (502,713)
                                                       --------       ----------      ----------       ----------      -----------

Operating income .........................               (5,454)          47,095          50,770                -           92,411
Equity in income of subsidiaries .........               77,047                -               -          (77,047)               -
Intercompany royalty income (expense) net                     -           20,870         (20,870)                                -
Intercompany dividend income .............                    -           16,744               -          (16,744)               -
Interest expense .........................              (31,030)         (14,264)         (9,279)                          (54,573)
Investment income, net ...................                    -                -          27,618                            27,618
Other expense, net .......................                 (225)          (6,781)         (3,072)                          (10,078)
                                                       --------       ----------      ----------       ----------      -----------
Income before income taxes ...............               40,338           63,664          45,167          (93,791)          55,378
Income tax (provision) benefit ...........               11,895          (19,261)        (12,083)                          (19,449)
                                                       --------       ----------      ----------       ----------      -----------
Income before cumulative effect of
   accounting change .....................               52,233           44,403          33,084          (93,791)          35,929
Cumulative effect of accounting change,
   net of income tax benefit of $216 .....                    -             (473)             33                -             (440)
                                                       --------       ----------      ----------       ----------      -----------
Net income ...............................             $ 52,233       $   43,930      $   33,117       $  (93,791)     $    35,489
                                                       ========       ==========      ==========       ==========      ===========


                                ISP CHEMCO INC.
                  CONDENSED CONSOLIDATING STATEMENT OF INCOME
                      NINE MONTHS ENDED SEPTEMBER 29, 2002
                                  (Thousands)
                                                                                          Non-
                                                        Parent         Guarantor      Guarantor
                                                       Company        Subsidiaries    Subsidiaries     Eliminations    Consolidated
                                                       --------       -------------   ------------     ------------    ------------

Net sales ................................             $      -       $  334,509      $  307,702       $        -      $   642,211
Intercompany net sales ...................                    -          156,093           7,927         (164,020)               -
                                                       --------       ----------      ----------       ----------       ----------
   Total net sales .......................                    -          490,602         315,629         (164,020)         642,211
                                                       --------       ----------      ----------       ----------       ----------
Costs and Expenses:
   Cost of products sold .................                    -         (343,362)       (236,795)         164,020         (416,137)
   Selling, general and administrative ...                    -          (85,538)        (41,310)                         (126,848)
   Gain on sale of assets ................                    -            2,389           3,079                             5,468
   Gains on settlement of contracts.......                    -            6,760               -                             6,760
   Amortization of intangibles ...........                    -             (680)              -                              (680)
                                                       --------       ----------      ----------       ----------       ----------
     Total costs and expenses ............                    -         (420,431)       (275,026)         164,020         (531,437)
                                                       --------       ----------      ----------       ----------       ----------

Operating income .........................                    -           70,171          40,603                -          110,774
Equity in income (loss) of subsidiaries ..              (71,230)               -               -           71,230                -
Intercompany royalty income (expense), net                    -           22,514         (22,514)                                -
Intercompany dividend income .............                    -            4,408               -           (4,408)               -
Interest expense .........................                2,332          (50,069)          1,890                           (45,847)
Other expense, net .......................                 (810)          (5,247)           (144)                           (6,201)
                                                       --------       ----------      ----------       ----------       ----------
Income (loss) before income taxes.........              (69,708)          41,777          19,835           66,822           58,726
Income tax (provision) benefit ...........                 (533)         (17,148)         (3,007)                          (20,688)
                                                       --------       ----------      ----------       ----------       ----------
Income (loss) before extraordinary item and
  cumulative effect of accounting change..              (70,241)          24,629          16,828           66,822           38,038
Extraordinary item - loss on early
   retirement of debt, net of income tax
   benefit of $1,460 .....................               (2,834)               -               -                            (2,834)
Cumulative effect of accounting change....              (42,713)        (112,687)              -                -         (155,400)
                                                       --------       ----------      ----------       ----------       ----------
Net income (loss).........................            $(115,788)      $  (88,058)     $   16,828       $   66,822       $ (120,196)
                                                      =========       ==========      ==========       ==========       ==========
</TABLE>


                                       12

<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 10. GUARANTOR FINANCIAL INFORMATION - (CONTINUED)
<TABLE>
<CAPTION>

                                ISP CHEMCO INC.
                     CONDENSED CONSOLIDATING BALANCE SHEET
                               DECEMBER 31, 2001
                                (Thousands)

                                                                                         Non-
                                                         Parent         Guarantor     Guarantor
                                                        Company       Subsidiaries   Subsidiaries      Eliminations    Consolidated
                                                       --------       ------------   ------------      ------------    ------------
<S>                                                    <C>            <C>             <C>              <C>             <C>
ASSETS

Current Assets:
   Cash and cash equivalents .............             $       5      $    3,611      $   7,214        $        -      $    10,830
   Restricted cash .......................                81,130         101,000              -                            182,130
   Accounts receivable, trade, net .......                     -          12,325         74,286                             86,611
   Accounts receivable, other ............                   308           4,950         15,913                             21,171
   Income taxes receivable ...............                21,133          (3,395)       (11,995)                             5,743
   Receivable from related parties, net ..                   140          11,999           (540)                            11,599
   Inventories ...........................                     -         121,861         68,721                            190,582
   Deferred income tax benefits...........                     -          20,263         12,666                             32,929
   Other current assets ..................                     -           4,742          3,882                              8,624
                                                       ---------      ----------      ---------        ----------       ----------
     Total current assets ................               102,716         277,356        170,147                 -          550,219
Investment in subsidiaries ...............               376,332         137,044              -          (513,376)               -
Intercompany loans .......................                16,021          (4,538)       (11,483)                                 -
Due from (to) subsidiaries, net ..........                     -          79,329        (79,329)                                 -
Property, plant and equipment ............                     -         494,489         62,236                            556,725
Goodwill, net ............................               132,644         361,883          2,875                            497,402
Long-term receivable from parent company .                     -               -         28,583                             28,583
Intangible assets, net ...................                     -          14,725            442                             15,167
Other assets .............................                 1,487          42,581         12,559                             56,627
                                                       ---------      ----------      ---------        ----------      -----------
Total Assets .............................             $ 629,200      $1,402,869      $ 186,030        $ (513,376)     $ 1,704,723
                                                       =========      ==========      =========        ==========      ===========


LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
   Short-term debt .......................             $       -      $        -      $     143        $        -      $       143
   Current maturities of long-term debt ..               182,093           2,372             35                            184,500
   Accounts payable ......................                     -          25,612         18,107                             43,719
   Accrued liabilities ...................                 3,452          69,993         20,450                             93,895
                                                       ---------      ----------      ---------        ----------      -----------
     Total Current liabilities ...........               185,545          97,977         38,735                 -          322,257
Long-term debt less current maturities ...                     -         719,549              8                            719,557
Deferred income taxes ....................                     -         154,454          9,649                            164,103
Other liabilities ........................                17,531          54,557            594                             72,682
Total Shareholder's Equity ...............               426,124         376,332        137,044          (513,376)         426,124
                                                       ---------      ----------      ---------        ----------      -----------
Total Liabilities and Shareholder's
   Equity ................................             $ 629,200      $1,402,869      $ 186,030        $ (513,376)     $ 1,704,723
                                                       =========      ==========      =========        ==========      ===========
</TABLE>









                                       13

<PAGE>


                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 10. GUARANTOR FINANCIAL INFORMATION - (CONTINUED)
<TABLE>
<CAPTION>

                                ISP CHEMCO INC.
                     CONDENSED CONSOLIDATING BALANCE SHEET
                              SEPTEMBER 29, 2002
                                (Thousands)

                                                                                         Non-
                                                         Parent         Guarantor     Guarantor
                                                        Company       Subsidiaries   Subsidiaries      Eliminations    Consolidated
                                                       --------       ------------   ------------      ------------    ------------
<S>                                                    <C>            <C>             <C>              <C>             <C>
ASSETS
Current Assets:
   Cash and equivalents ..................            $        7      $    2,408      $    6,596       $        -       $   9,011
   Accounts receivable, trade, net .......                     -           9,544          81,317                           90,861
   Accounts receivable, other ............                     -           5,032          18,158                           23,190
   Receivable from related parties, net ..                   149          15,698            (267)                          15,580
   Inventories ...........................                     -         113,800          63,784                          177,584
   Deferred income tax benefits...........                     -          20,263          16,581                           36,844
   Other current assets ..................                     -           3,609           6,407                           10,016
                                                       ---------      ----------      ----------       ----------      ----------
     Total current assets ................                   156         170,354         192,576                -         363,086
Investment in subsidiaries ...............               228,190         163,021               -         (391,211)              -
Intercompany loans .......................                16,021         (16,354)            333                                -
Due from (to) subsidiaries, net ..........                     -          50,858         (50,858)                               -
Property, plant and equipment ............                     -         494,578          64,775                          559,353
Goodwill, net ............................                89,931         235,775               -                          325,706
Long-term receivable from related party ..                     -               -          29,869                           29,869
Intangible assets, net ...................                     -           8,385               -                            8,385
Other assets .............................                     -          57,567             288                           57,855
                                                       ---------      ----------      ----------       ----------      ----------
Total Assets .............................            $  334,298      $1,164,184      $  236,983       $ (391,211)     $1,344,254
                                                       =========      ==========      ==========       ==========      ==========

LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
   Short-term debt .......................            $       -       $        -      $      158        $       -       $     158
   Current maturities of long-term debt ..                    -            2,608               1                            2,609
   Accounts payable ......................                    -           31,841          26,470                           58,311
   Accrued liabilities ...................                    -           56,659          24,356                           81,015
   Income taxes ..........................               (7,118)           3,240          14,266                           10,388
                                                       ---------      ----------      ----------       ----------      ----------
     Total Current Liabilities ...........               (7,118)          94,348          65,251                -         152,481
Long-term debt less current maturities ...                    -          634,323               9                          634,332
Deferred income taxes ....................                    -          158,483           8,172                          166,655
Other liabilities ........................               17,480           48,840             530                           66,850
Total Shareholder's Equity ...............              323,936          228,190         163,021         (391,211)        323,936
                                                      ---------       ----------      ----------       ----------      ----------
Total Liabilities and Shareholder's
   Equity ................................            $ 334,298       $1,164,184      $  236,983       $ (391,211)     $1,344,254
                                                      =========       ==========      ==========       ==========      ==========
</TABLE>







                                       14


<PAGE>


                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 10. GUARANTOR FINANCIAL INFORMATION - (CONTINUED)
<TABLE>
<CAPTION>

                                ISP CHEMCO INC.
                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW
                      NINE MONTHS ENDED SEPTEMBER 30, 2001
                             (Thousands)

                                                                                                        Non-
                                                                         Parent      Guarantor        Guarantor
                                                                        Company     Subsidiaries     Subsidiaries      Consolidated
                                                                       --------     ------------     ------------      ------------
<S>                                                                    <C>          <C>              <C>               <C>
Cash and cash equivalents, beginning of period............             $      -     $    2,884       $   11,879        $  14,763
                                                                       --------     ----------       ----------        ---------
Cash provided by (used in) operating activities:
  Net income (loss).......................................              (41,558)        43,930           33,117           35,489
  Adjustments to reconcile net income (loss) to net cash
     provided by (used in) operating activities:
     Cumulative effect of accounting change...............                    -            473              (33)             440
     Depreciation.........................................                    -         32,581            6,662           39,243
     Goodwill amortization................................                2,723          9,308                -           12,031
     Deferred income taxes................................                    -        (13,859)           2,377          (11,482)
     Unrealized losses on trading securities and other
       short-term investments ............................                    -              -            1,039            1,039
  (Increase) decrease in working capital items............               19,301         39,722          (98,571)         (39,548)
  Purchases of trading securities.........................                    -              -         (217,335)        (217,335)
  Proceeds from sales of trading securities...............                    -              -          376,292          376,292
  Proceeds from sale of accounts receivable...............                    -              -           (7,791)          (7,791)
  (Increase) decrease in receivable from related parties..              (18,006)        19,031             (974)              51
  Change in investment in and advances to affiliates......               48,087       (208,868)         160,781                -
  Change in cumulative translation adjustment.............                    -              -             (765)            (765)
  Other, net..............................................                2,379         (4,814)           4,191            1,756
                                                                       --------     ----------       ----------        ---------
Net cash provided by (used in) operating activities.......               12,926        (82,496)         258,990          189,420
                                                                       --------     ----------       ----------        ---------
Cash provided by (used in) investing activities:
  Capital expenditures and acquisitions...................                    -        (37,037)         (21,679)         (58,716)
  Purchases of available-for-sale securities..............                    -              -         (121,299)        (121,299)
  Proceeds from sales of available-for-sale securities....                    -              -           19,700           19,700
  Proceeds from sales of other short-term investments.....                    -              -           12,529           12,529
                                                                       --------     ----------       ----------        ---------
Net cash used in investing activities.....................                    -        (37,037)        (110,749)        (147,786)
                                                                       --------     ----------       ----------        ---------
Cash provided by (used in) financing activities:
  Decrease in short-term debt.............................                    -              -         (108,542)        (108,542)
  Proceeds from issuance of debt..........................              301,364        225,000                -          526,364
  Decrease in borrowings under revolving credit facility                      -       (115,400)               -         (115,400)
  Repayments of long-term debt............................              (36,170)       (28,893)               4          (65,059)
  Increase (decrease) in loans from parent company .......               (1,085)             -           30,000           28,915
  Change in net intercompany loans .......................                2,570         29,612          (32,182)               -
  Increase in restricted cash ............................             (257,649)             -                -         (257,649)
  Financing fees and expenses ............................               (7,068)        (6,721)               -          (13,789)
  Effect of Restructuring - transfer to ISP Investco LLC..                    -              -          (22,220)         (22,220)
  Dividends and distributions to parent company...........              (35,000)        16,744          (16,744)         (35,000)
  Capital contribution from parent company................               20,116              -                -           20,116
                                                                       --------     ----------       ----------        ---------
Net cash provided by (used in) financing activities.......              (12,922)       120,342         (149,684)         (42,264)
                                                                       --------     ----------       ----------        ---------
Effect of exchange rate changes on cash...................                    -              -             (219)            (219)
                                                                       --------     ----------       ----------        ---------
Net change in cash and cash equivalents...................                    4            809           (1,662)            (849)
                                                                       --------     ----------       ----------        ---------
Cash and cash equivalents, end of period..................             $      4     $    3,693       $   10,217        $  13,914
                                                                       ========     ==========       ==========        =========
</TABLE>


                                       15

<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 10. GUARANTOR FINANCIAL INFORMATION - (CONTINUED)
<TABLE>
<CAPTION>

                                ISP CHEMCO INC.
                 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOW
                      NINE MONTHS ENDED SEPTEMBER 29, 2002
                             (Thousands)

                                                                                                        Non-
                                                                         Parent      Guarantor        Guarantor
                                                                        Company     Subsidiaries     Subsidiaries      Consolidated
                                                                       --------     ------------     ------------      ------------
<S>                                                                    <C>          <C>              <C>               <C>

Cash and cash equivalents, beginning of period............             $      5      $    3,611      $     7,214        $  10,830
                                                                       --------     -----------       ----------        ---------
Cash provided by (used in) operating activities:
  Net income (loss).......................................              (48,966)        (88,058)          16,828         (120,196)
  Adjustments to reconcile net income (loss) to net cash
     provided by (used in) operating activities:
     Extraordinary item...................................                2,834               -                -            2,834
     Cumulative effect of accounting change...............               42,713         112,687                -          155,400
     Gain on sale of assets...............................                    -          (2,389)          (3,079)          (5,468)
     Depreciation.........................................                    -          34,841            7,286           42,127
     Amortization of intangibles..........................                    -             680                -              680
     Deferred income taxes................................                    -          12,966           (5,392)           7,574
  (Increase) decrease in working capital items............               10,871          (5,289)           3,511            9,093
  Proceeds (repayments) from sale of accounts receivable.                     -               -            3,932            3,932
  (Increase) decrease in receivable from related parties..                   (9)         (3,365)          (1,737)          (5,111)
  Change in amounts due to (from) subsidiaries...........                     -          28,471          (28,471)               -
  Change in investment in and advances to affiliates....                 89,489         (88,628)            (861)               -
  Change in cumulative translation adjustment.............                    -               -            9,374            9,374
  Other, net..............................................                   15            (113)          (5,426)          (5,524)
                                                                       --------      ----------       ----------        ---------
Net cash provided by (used in) operating activities......                96,947           1,803           (4,035)          94,715
                                                                       --------      ----------       ----------        ---------
Cash provided by (used in) investing activities:
  Capital expenditures and acquisitions..................                     -         (37,348)          (5,123)         (42,471)
  Net proceeds from sale of assets.......................                     -           7,533           19,738           27,271
                                                                       --------      ----------       ----------        ---------
Net cash provided by (used in) investing activities......                     -         (29,815)          14,615          (15,200)
                                                                       --------      ----------       ----------        ---------
Cash provided by (used in) financing activities:
  Increase in short-term debt............................                     -               -               15               15
  Decrease in borrowings under revolving
    credit facility.......................................                    -         (85,250)               -          (85,250)
  Repayments of long-term debt............................             (182,232)             63              (33)        (182,202)
  Call premium on redemption of debt......................               (2,734)              -                -           (2,734)
  Change in net intercompany loans........................                    -          11,816          (11,816)               -
  Decrease in restricted cash.............................               81,130         101,000                -          182,130
  Financing fees and expenses.............................                    -            (820)               -             (820)
  Capital contribution from parent company................                6,891               -                -            6,891
                                                                       --------      ----------       ----------        ---------
Net cash provided by (used in) financing activities.......              (96,945)         26,809          (11,834)         (81,970)
                                                                       --------      ----------       ----------        ---------
Effect of exchange rate changes on cash..................                     -               -              636              636
                                                                       --------      ----------       ----------        ---------
Net change in cash and cash equivalents...................                    2          (1,203)            (618)          (1,819)
                                                                       --------      ----------       ----------        ---------
Cash and cash equivalents, end of period..................             $      7      $    2,408       $    6,596        $   9,011
                                                                       ========      ==========       ==========        =========
</TABLE>


                                       16

<PAGE>

                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 11.  CONTINGENCIES

Environmental Litigation

     The  Company,  together  with other  companies,  is a party to a variety of
proceedings  and  lawsuits  involving   environmental  matters   ("Environmental
Claims")  under  the  Comprehensive   Environmental  Response  Compensation  and
Liability Act, Resource Conservation and Recovery Act and similar state laws, in
which  recovery  is sought  for the cost of  cleanup  of  contaminated  sites or
remedial  obligations are imposed, a number of which Environmental Claims are in
the early stages or have been dormant for protracted periods.

     While the Company cannot predict  whether  adverse  decisions or events can
occur in the future, in the opinion of the Company's management,  the resolution
of the Environmental  Claims should not be material to the business,  liquidity,
results of operations, cash flows or financial position of the Company. However,
adverse  decisions or events,  particularly  as to increases in remedial  costs,
discovery of new contamination,  assertion of natural resource damages,  and the
liability and the financial  responsibility of the Company's insurers and of the
other parties involved at each site and their insurers,  could cause the Company
to increase its estimate of its liability in respect of those matters. It is not
currently possible to estimate the amount or range of any additional liability.

     For further information regarding environmental matters,  reference is made
to Note 20 to Consolidated Financial Statements contained in the Form 10-K.

Tax Claim Against G-I Holdings Inc.

     The Company and certain of its subsidiaries  were members of a consolidated
group for Federal income tax purposes that included G-I Holdings Inc., (the "G-I
Holdings  Group") in certain  prior years and,  accordingly,  would be severally
liable for any tax liability of the G-I Holdings Group in respect of those prior
years.  Effective  as of January 1, 1997,  neither  the  Company  nor any of its
subsidiaries  are  members  of the G-I  Holdings  Group.  In January  2001,  G-I
Holdings filed a voluntary petition for  reorganization  under Chapter 11 of the
U.S. Bankruptcy Code due to its  asbestos-related  bodily injury claims relating
to the inhalation of asbestos fiber.

     On  September  15, 1997,  G-I Holdings  received a notice from the Internal
Revenue  Service  (the  "IRS") of a  deficiency  in the amount of $84.4  million
(after  taking  into  account  the use of net  operating  losses and foreign tax
credits  otherwise  available  for use in later  years) in  connection  with the
formation  in 1990 of  Rhone-Poulenc  Surfactants  and  Specialties,  L.P.  (the
"surfactants  partnership"),  a  partnership  in  which  G-I  Holdings  held  an
interest.  G-I Holdings  has advised the Company  that it believes  that it will
prevail in the tax matter arising out of the surfactants  partnership,  although
there can be no assurance in this regard. The Company believes that the ultimate
disposition  of this  matter  will not have a  material  adverse  effect  on its
business,  financial  position or results of operations.  On September 21, 2001,
the IRS filed a proof of claim  with  respect  to such  deficiency  against  G-I
Holdings in the G-I Holdings  bankruptcy.  On May 7, 2002, G-I Holdings filed an
objection to that proof of claim.  On July 13, 2002, the IRS filed a motion with
the U.S.  District  Court for a withdrawal  of the  reference to the  bankruptcy
court of G-I Holdings' objection to the proof of claim, which motion


                                       17


<PAGE>
                                ISP CHEMCO INC.

     NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)


NOTE 11.  CONTINGENCIES - (CONTINUED)

remains  pending.  If  such  proof  of  claim  is sustained,  the Company and/or
some of the  Company's  subsidiaries,  together  with G-I  Holdings  and several
current and former  subsidiaries of G-I Holdings,  would be severally liable for
such taxes and interest in the amount of approximately $250.0 million should G-I
Holdings  be  unable to  satisfy  such  liability.  For  additional  information
relating  to  G-I  Holdings,  reference  is  made  to  Notes  8,  16  and  20 to
Consolidated Financial Statements contained in the Form 10-K.


NOTE 12.  NEW ACCOUNTING PRONOUNCEMENTS

     In  August  2001,  the FASB  issued  SFAS No.  143,  "Accounting  for Asset
Retirement  Obligations."  SFAS No. 143  establishes  accounting  and  reporting
standards for legal  obligations  associated  with the  retirement of long-lived
assets that  result  from the  acquisition,  construction,  development  and the
normal  operation of a  long-lived  asset.  SFAS No. 143 requires  that the fair
value of a liability  for an asset  retirement  obligation  be recognized in the
period in which it is incurred.  Upon initial recognition of such liability,  an
entity must  capitalize  the asset  retirement  cost by increasing  the carrying
amount of the related  long-lived asset and subsequently  depreciating the asset
retirement  cost over the  useful  life of the  related  asset.  SFAS No. 143 is
effective  for fiscal  years  beginning  after June 15, 2002,  although  earlier
application is encouraged. The Company is in the process of assessing the impact
of this Statement on its financial statements.

     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No.  4,  44,  and  64,  Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections."  SFAS No. 145 eliminates the  requirement of SFAS No. 4 that gains
and losses on the early  extinguishments of debt be recorded as an extraordinary
item  unless  such  gains  and  losses  meet  the  criteria  of APB  No.  30 for
classification as  extraordinary.  The rescission of SFAS No. 4 is effective for
fiscal  years  beginning  after May 15,  2002,  although  early  application  is
encouraged. The Company intends to adopt SFAS No. 145 effective January 1, 2003,
which will result in the  Company's  first  quarter  2002  pre-tax  loss of $7.1
million on the early extinguishment of debt being reclassified to other expense,
net.

     In July  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
Associated with Exit or Disposal  Activities." SFAS No. 146 addresses  financial
accounting and reporting for costs  associated with exit or disposal  activities
and supercedes Emerging Issues Task Force Issue No. 94-3, "Liability Recognition
for Certain  Employee  Termination  Benefits and Other Costs to Exit an Activity
(including  Certain Costs Incurred in a  Restructuring)."  SFAS No. 146 requires
that a liability  for a cost  associated  with an exit or  disposal  activity be
recognized  when the  liability  is  incurred,  and  concludes  that an entity's
commitment to an exit plan does not by itself create a present  obligation  that
meets the definition of a liability.  This Statement also  establishes that fair
value is the objective of initial measurement of the liability.  SFAS No. 146 is
effective for exit or disposal  activities that are initiated after December 31,
2002,  with early  application  encouraged.  The  Company  is in the  process of
assessing the impact of this Statement on its financial statements.



                                       18

<PAGE>


          ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                    CONDITION AND RESULTS OF OPERATIONS


     Unless  otherwise  indicated by the context,  "we," "us" and "our" refer to
ISP Chemco Inc. and its consolidated subsidiaries.


CRITICAL ACCOUNTING POLICIES

     The  preparation of our financial  statements in conformity with accounting
principles  generally  accepted in the United States  requires our management to
make  estimates  and  judgments  that  affect  the  reported  amounts of assets,
liabilities,  revenues,  and  expenses,  and related  disclosure  of  contingent
liabilities. On an on-going basis, we evaluate our estimates,  including but not
limited  to  those   related  to   doubtful   accounts,   inventory   valuation,
environmental  liabilities,  goodwill and intangible assets,  pensions and other
postemployment  benefits, and contingent  liabilities.  We base our estimates on
historical  experience  adjusted for current  conditions,  and on various  other
assumptions that are believed to be reasonable under the current  circumstances,
the  results  of which form the basis for making  judgments  about the  carrying
values of assets and liabilities. Actual results may differ from these estimates
under different  assumptions or conditions.  We do not anticipate any changes in
management  estimates  that  would  have a  material  impact on our  operations,
liquidity or capital  resources.  We believe the following  critical  accounting
policies are the most important to the portrayal of our financial  condition and
results of operations and require our management's  more  significant  judgments
and estimates in the preparation of our consolidated financial statements.

Allowance for Doubtful Accounts

     We maintain allowances for doubtful accounts for estimated losses resulting
from the  inability  of our  customers  to make  required  payments.  Management
continuously  assesses the financial  condition of our customers and the markets
in  which  these  customers  participate.  If  the  financial  condition  of our
customers  were to  deteriorate,  resulting in an impairment of their ability to
make payments, additional allowances may be required.

Inventories

     Inventories  are valued at the lower of cost or market.  The LIFO (last-in,
first-out)  method is utilized to determine cost for  substantially all domestic
acetylene-based  finished  goods and  work-in-process  and the raw  materials to
produce these products.  All other inventories are valued on the FIFO (first-in,
first out) method.  We write down our inventories for estimated  obsolescence or
unmarketable inventories equal to the difference between the cost of inventories
and their estimated market value based upon assumptions  about future demand and
market  conditions.  If actual market  conditions  are less favorable than those
projected by management, additional inventory write-downs may be required.


                                       19

<PAGE>


Goodwill and Other Intangibles

     Through  December  31,  2001,  we  amortized  goodwill  and  certain  other
intangible assets on a straight-line basis over the expected useful lives of the
underlying  assets.  In accordance with the provisions of Statement of Financial
Accounting  Standards No. 142, "Goodwill and Other Intangible Assets," effective
January 1, 2002, goodwill is no longer being amortized over its estimated useful
life, but rather will be subject to at least an annual assessment for impairment
and more frequently if circumstances indicate a possible impairment.  We adopted
SFAS No. 142 on  January  1, 2002.  Accordingly,  we  completed  a  transitional
impairment test, effective January 1, 2002, and recognized a goodwill impairment
loss of $155.4  million  as the  cumulative  effect  of a change  in  accounting
principle. The write-off represents the goodwill associated with our Performance
Chemicals,  Fine Chemicals and Industrial business segment. We use both a market
comparable  approach  and income  approach  to  determine  the fair value of our
reporting  units. We will perform our annual test for impairment  before the end
of the year 2002.

     Other  intangible  assets will be amortized  over their useful  lives.  The
useful  life  of an  intangible  asset  is  based  on  management's  assumptions
regarding  the  expected  use of the asset and other  assumptions.  If events or
circumstances  indicate  that the life of an  intangible  asset has changed,  it
could  result  in  higher  future  amortization  charges  or  recognition  of an
impairment loss.

Environmental Liability

     We accrue  environmental  costs when it is probable that we have incurred a
liability  and the  expected  amount  can be  reasonably  estimated.  The amount
accrued reflects our assumptions about remedial requirements at the contaminated
site,  the nature of the remedy,  the  outcome of  discussions  with  regulatory
agencies and other potential  responsible  parties at multi-party sites, and the
number and financial viability of other potentially responsible parties. Adverse
decisions or events,  particularly as to increases in remedial costs,  discovery
of  new  contamination,   assertion  of  natural  resource  damages,  plans  for
development  of our  Linden,  New Jersey  property,  and the  liability  and the
financial  responsibility  of our insurers and of the other parties  involved at
each site and  their  insurers,  could  cause us to  increase  our  estimate  of
liability in respect of those matters.  It is not currently possible to estimate
the amount or range of any additional liability.

Pension and Other Postemployment Benefits

     We maintain  defined  benefit plans that provide  eligible  employees  with
retirement   benefits.   In   addition,   while  we  generally  do  not  provide
postretirement  medical and life insurance benefits,  we subsidize such benefits
for certain employees and certain retirees. The costs and obligations related to
these benefits reflect our assumptions  related to general  economic  conditions
(particularly  interest  rates),  expected  return on plan  assets,  and rate of
compensation   increases   for   employees.   Projected   health  care  benefits
additionally  reflect our assumptions about health care cost trends. The cost of
providing  plan  benefits  also  depends on  demographic  assumptions  including
retirements, mortality, turnover, and


                                       20

<PAGE>

plan  participation.  If actual experience differs from these  assumptions,  the
cost of providing these benefits could increase or decrease.



RESULTS OF OPERATIONS - THIRD QUARTER 2002 COMPARED WITH
                        THIRD QUARTER 2001

     We recorded  third quarter 2002 net income of $10.9  million  compared with
net income of $6.0  million in the third  quarter of 2001.  Third  quarter  2001
results  reflected  $4.0  million of goodwill  amortization.  Net income for the
third quarter of 2001, adjusted to exclude the goodwill amortization,  was $10.0
million.  On a comparable  basis,  the improved results for the third quarter of
2002  reflected  $6.3 million  lower  interest  expense and $1.0 million  higher
operating income, partially offset by $3.2 million increased other expense, net.

     Net sales for the third quarter of 2002 were $208.4  million  compared with
$188.6 million for the same period in 2001. The 10.5% increase in sales resulted
primarily  from the  contribution  to sales  from the  biocides  business  ($7.9
million),  which was acquired on December  31, 2001,  higher unit volumes in the
Personal Care,  Pharmaceutical,  Performance Chemicals and Industrial businesses
(totaling $13.4 million),  and the favorable impact of the weaker U.S. dollar in
Europe  ($4.4  million).  Lower  pricing in the  Industrial  and  Personal  Care
businesses (totaling $4.7 million) partially offset the sales gains.

     Gross margins for the third quarter of 2002 were 36.6%  compared with 39.1%
in the third quarter of 2001. The decline in margins  resulted  primarily from a
reduction in the Fine  Chemicals  business due to the  Polaroid  bankruptcy  and
price declines in the Industrial business.

     Operating  income for the third quarter of 2002 was $35.6 million  compared
with $30.6 million for the third quarter of 2001.  Excluding the $4.0 million of
goodwill  amortization in the third quarter of 2001,  operating income was $34.6
million for the third quarter of 2001. On a comparable  basis,  operating income
in the Personal Care business was up $3.0 million mainly due to higher  volumes,
while  in the  Pharmaceutical,  Food and  Beverage  business,  operating  income
increased   $3.5  million   primarily  due  to  improved   volumes  and  mix  in
pharmaceutical  products.  Operating income was lower in Performance  Chemicals,
Fine Chemicals and  Industrial,  as strength in  Performance  Chemicals (up $3.9
million),  which includes the additional  profit  contribution from the biocides
business,  did not offset unfavorable pricing and higher  manufacturing costs in
Industrial  (totaling  $5.8 million) and lower volumes in Fine  Chemicals  ($7.0
million).  Operating income for the Mineral Products business  decreased by $0.3
million  on 3%  higher  sales due to  increased  manufacturing  costs.  Selling,
general and  administrative  expenses for the third quarter of 2002 increased 4%
to $40.6 million from $39.1 million in the same period last year,  primarily due
to the biocides  acquisition and to higher selling and  distribution  costs, but
those  expenses as a percentage of sales were 19.5%  compared with 20.7% in last
year's third quarter.

                                       21

<PAGE>



     Interest  expense for the third  quarter of 2002 was $14.1  million  versus
$20.3  million for the same period last year.  The 31% decrease was due to lower
average borrowings.  Other expense,  net, for the third quarter of 2002 was $4.2
million  compared  with $1.1  million in last  year's  third  quarter,  with the
increased expense due to unfavorable foreign exchange.


Business Segment Review

     A  discussion  of  operating  results  for  each of our  business  segments
follows.  We operate our Specialty  Chemicals  business through three reportable
business  segments,  in addition to the Mineral Products segment.  Each business
segment was  favorably  impacted in the third  quarter of 2002 by the absence of
goodwill amortization. The business segment discussion that follows excludes the
impact  of  goodwill  amortization  on  third  quarter  2001  results.  Goodwill
amortization in the third quarter of 2001 by business segment was as follows:

                                          (Millions)
   Personal Care                             $1.2
   Pharmaceutical, Food and Beverage          1.0
   Performance Chemicals, Fine Chemicals
      and Industrial                          1.0
   Mineral Products                           0.8


Personal Care

     Sales in the third quarter of 2002 were $51.0  million  compared with $45.5
million  for the same  period last year,  while  operating  income for the third
quarter of 2002  increased  to $10.0  million  from $7.0  million in last year's
third  quarter.  The 12% increase in sales  resulted from higher unit volumes in
both hair care and skin care products  ($5.2  million),  mainly in North America
and  Europe,  and also as a result of the  favorable  impact of the weaker  U.S.
dollar in Europe ($1.2 million).  The higher  operating income resulted from the
favorable  volumes ($3.7  million),  the  favorable  impact of the weaker dollar
($0.9 million) and $1.0 million lower operating  expenses,  partially  offset by
unfavorable manufacturing costs ($1.8 million).

Pharmaceutical, Food and Beverage

     Sales for the Pharmaceutical,  Food and Beverage segment were $62.3 million
for the third  quarter of 2002 compared with $57.8 million for the third quarter
of 2001.  The 8% sales  growth  reflected  higher unit volumes  ($3.1  million),
primarily in the pharmaceutical excipients market in North America and Asia, and
also  reflected  the  favorable  impact of the weaker U.S dollar in Europe ($1.4
million).

     Operating  income for the  Pharmaceutical,  Food and  Beverage  segment was
$17.0  million in the third  quarter of 2002  compared with $13.5 million in the
same period last year.  The 26%  increase in earnings  primarily  resulted  from
improved volumes ($3.3 million) in  pharmaceutical  products,  and the favorable
impact of the weaker

                                       22

<PAGE>

dollar  ($1.1 million),  partially  offset  by  unfavorable  manufacturing costs
($0.9 million).

Performance Chemicals, Fine Chemicals and Industrial

     Sales in the third quarter of 2002 were $70.5  million  compared with $61.5
million in the third  quarter of 2001.  The 15% increase in sales was  primarily
attributable  to the biocides  business  ($7.9  million),  which was acquired on
December  31,  2001.  The  increased  sales also  reflected  higher  Performance
Chemicals and  Industrial  volumes  (totaling  $5.5  million) in the  industrial
specialty,  agriculture  and  specialty  coatings  markets,  in  addition to the
favorable impact of the weaker U.S dollar in Europe ($1.8 million).  These sales
increases  were  partially  offset by lower pricing in the  Industrial  business
($3.9 million).  In the Fine Chemicals  business,  the lack of sales to Polaroid
more  than  offset   increased  sales  volumes  of  bulk   pharmaceuticals   and
pharmaceutical intermediates.

     Operating  income  for  the  Performance  Chemicals,   Fine  Chemicals  and
Industrial  segment was $3.0 million in the third  quarter of 2002 compared with
$8.4 million for the third quarter of 2001.  The  reduction in operating  income
was  attributable to losses from the Fine Chemicals  business due to unfavorable
volumes and the loss of sales to Polaroid (totaling $7.0 million).  In addition,
Industrial  profits were lower due to the impact of  unfavorable  pricing  ($3.9
million)  and  unfavorable   manufacturing   costs  ($2.0  million).   Partially
offsetting  these  reductions  in  operating  profits  was $3.9  million  higher
operating  income in  Performance  Chemicals due to higher volumes and favorable
manufacturing  efficiencies  (totaling  $1.9 million) and also to the additional
profit contribution from the biocides business.

Mineral Products

     Sales for the Mineral  Products  segment for the third quarter of 2002 were
$24.6 million  compared with $23.8 million for the third quarter of 2001. The 3%
increase was due equally to higher sales to Building  Materials  Corporation  of
America,  an  affiliate,  and to higher third party sales.  We are  beginning to
experience  competitive  pricing pressures in the Mineral Products business as a
result of additional capacity coming on stream in the industry.

     Operating  income for the third  quarter of 2002 was $5.5 million  compared
with  $5.8  million  for the  third  quarter  of  2001,  reflecting  unfavorable
manufacturing  costs due to start-up costs associated with the Ione,  California
roofing granules plant acquired in April 2002.


RESULTS OF OPERATIONS - FIRST NINE MONTHS 2002 COMPARED WITH
                        FIRST NINE MONTHS 2001

     For the first nine months of 2002, we recorded a net loss of $120.2 million
compared  with net income of $35.5  million in the first nine months of 2001. In
accordance  with the adoption of SFAS No. 142, we completed a transitional  test
for impairment of goodwill, and, accordingly,  recorded a $155.4 million charge,
effective January 1,


                                       23

<PAGE>

2002,  for  the  cumulative  effect  of  a change in accounting  principle.  The
write-off  represents the goodwill  associated with our  Performance  Chemicals,
Fine Chemicals and Industrial  business  segment and was based upon our estimate
of fair value for these businesses,  considering  expected future cash flows and
profitability.

     First nine months 2002 results  also  include a $5.5  million  pre-tax gain
from the sale of the  FineTech  business,  $6.8  million of  pre-tax  gains from
contract  settlements and an after-tax  extraordinary  charge of $2.8 million on
the early  retirement  of debt.  First nine months 2001 results  included  $12.0
million of goodwill amortization,  prior to the adoption of SFAS No. 142, and an
after-tax charge of $0.4 million for the cumulative  effect of adopting SFAS No.
133, "Accounting for Derivative  Instruments and Hedging Activities."  Excluding
such charges and  nonrecurring  gains discussed  above,  adjusted "Income before
extraordinary  item and  cumulative  effect of accounting  change" for the first
nine months of 2002 was $30.1 million  compared with $48.0 million for the first
nine months of 2001. On a comparable basis, the lower results for the first nine
months of 2002 were mainly attributable to the absence of investment income as a
result of the corporate  restructuring  in June 2001  compared  with  investment
income of $27.6 million in the six-month period prior to the  restructuring.  In
addition,  results in the first nine months of 2002 reflected $5.9 million lower
adjusted  operating income  (excluding the nonrecurring  gains),  offset by $8.7
million lower interest expense and $3.9 million lower other expense, net.

     Net sales for the first nine  months of 2002 were $642.2  million  compared
with $595.1 million for the same period in 2001. The 8% increase in sales in the
first nine months of 2002 resulted primarily from the contribution to sales from
the biocides business ($25.6 million),  which was acquired on December 31, 2001,
and by higher unit volumes in the  Pharmaceutical,  Mineral  Products,  Personal
Care and Industrial businesses (totaling $35.6 million).  The weaker U.S. dollar
in Europe also had a favorable  impact  ($5.2  million) on net sales.  Partially
offsetting  these increases was lower pricing in the Industrial,  Fine Chemicals
and Personal Care businesses (totaling $19.2 million).

     Gross  margins for the first nine months of 2002 were 35.2%  compared  with
37.7% in the  first  nine  months  of 2001.  The  decline  in  margins  resulted
primarily  from a reduction in the Fine  Chemicals  business due to the Polaroid
bankruptcy,  unfavorable  manufacturing  costs,  and the  lower  pricing  in the
Industrial, Fine Chemicals and Personal Care businesses.

     Operating  income  for the first  nine  months of 2002 was  $110.8  million
compared  with $92.4  million for the first nine months of 2001.  Excluding  the
$12.2 million of nonrecurring pre-tax gains on the sale of the FineTech business
and the  settlements  of  contracts  in the first nine  months of 2002 and $12.0
million of  goodwill  amortization  in the first nine  months of 2001,  adjusted
operating  income was $98.5  million for the first nine months of 2002  compared
with $104.4  million for the first nine months of 2001.  On a comparable  basis,
the $5.9 million decrease in operating income in

                                       24

<PAGE>

the  first  nine  months  of 2002  was primarily  attributable  to lower results
in the Fine Chemicals,  Industrial and Personal Care businesses  (totaling $19.7
million).  Partially  offsetting  these lower  results were  improved  operating
profits in the Mineral Products and  Pharmaceutical  businesses  (totaling $10.2
million) and the  contribution  to income from the biocides  business.  Selling,
general and  administrative  expenses increased 5.5% in the first nine months of
2002 to $126.8  million  from  $120.2  million  in the same  period  last  year,
primarily due to the biocides  acquisition  and higher selling and  distribution
costs,  but those  expenses as a percentage  of sales were 19.8%  compared  with
20.2% last year.

     Interest expense for the first nine months of 2002 was $45.8 million versus
$54.6  million  for the same  period last year.  The  decrease  was due to lower
average borrowings,  partially offset by higher average interest rates. Interest
expense  for the first nine  months of 2001  included  interest on a $50 million
intercompany  loan from our parent company,  which was repaid at the time of the
restructuring in June 2001.  Investment  income in the first nine months of 2001
was $27.6  million prior to a corporate  restructuring  in June 2001 in which we
transferred our investment assets to our parent company, International Specialty
Holdings Inc. For additional information regarding this restructuring,  see Note
1 to  Consolidated  Financial  Statements  contained  in the  Form  10-K.  Other
expense,  net, for the first nine months of 2002 was $6.2 million  compared with
other  expense,  net,  of $10.1  million in last year's  period,  with the lower
expense due to the impact of a weaker U.S.  dollar in Europe and Asia and a $1.4
million higher provision for  environmental  liability in last year's first nine
months.


Business Segment Review

     A  discussion  of  operating  results  for  each of our  business  segments
follows.  We operate our Specialty  Chemicals  business through three reportable
business  segments,  in addition to the Mineral Products segment.  Each business
segment was  favorably  impacted in the first nine months of 2002 by the absence
of goodwill amortization.  The business segment discussion that follows excludes
the impact of  goodwill  amortization  on nine  months  2001  results.  Goodwill
amortization  in the  first  nine  months  of 2001 by  business  segment  was as
follows:

                                          (Millions)
   Personal Care                             $3.6
   Pharmaceutical, Food and Beverage          3.1
   Performance Chemicals, Fine Chemicals
      and Industrial                          3.1
   Mineral Products                           2.3


Personal Care

     Sales in the first nine months of 2002 were $156.2  million  compared  with
$150.6  million in the same period  last year,  while  operating  income for the
first nine months of 2002 decreased to $28.1

                                       25

<PAGE>

million  from $30.7  million in the same  period  last year.  The 4% increase in
sales resulted from higher unit volumes in both hair care and skin care products
($7.3 million),  mainly in North America and Europe, and also as a result of the
favorable  impact of the weaker U.S. dollar in Europe ($1.3 million).  The lower
operating  income resulted  primarily from unfavorable  manufacturing  costs and
pricing ($7.0 million),  partially offset by the impact of the favorable volumes
($3.5  million)  and the  favorable  impact  of the  weaker  U.S.  dollar  ($0.9
million).

Pharmaceutical, Food and Beverage

     Sales for the Pharmaceutical, Food and Beverage segment were $181.0 million
for the first nine months of 2002, a 7% increase  compared  with $169.6  million
for the  first  nine  months  of 2001.  Sales  for the  Pharmaceutical  business
increased  by 11.5% in the first nine  months of 2002,  reflecting  higher  unit
volumes  ($11.1  million),  primarily in the excipients and oral care markets in
Europe and North America.  Sales for the Beverage and alginates food  businesses
decreased  by 2% and 4%,  respectively,  due to lower unit  volumes  and pricing
(totaling $1.7 million), primarily in Europe and Latin America.

     Operating  income for the  Pharmaceutical,  Food and  Beverage  segment was
$43.4  million in the first nine months of 2002  compared  with $42.4 million in
the same  period last year.  Operating  income for the  Pharmaceutical  business
increased 8% in the first nine months of 2002  compared  with the same period in
2001.  The  improvement  reflected  the impact of the higher unit volumes  ($5.0
million) and the  favorable  impact of the weaker U.S.  dollar  ($0.9  million),
partially offset by unfavorable  manufacturing  costs ($0.9 million).  Operating
results for the Beverage and alginates food  businesses  decreased by a total of
$2.7  million  in the first nine  months of 2002 due  primarily  to  unfavorable
manufacturing costs ($1.5 million) and, to a lesser extent, to the lower volumes
and pricing.

Performance Chemicals, Fine Chemicals and Industrial

     Sales in the first nine months of 2002 were $230.8  million  compared  with
$211.1  million  in the first  nine  months of 2001.  The 9% higher  sales  were
attributable  to the biocides  business ($25.6  million),  which was acquired on
December 31, 2001.  Sales for the  Performance  Chemicals,  Fine  Chemicals  and
Industrial businesses,  excluding biocides, decreased by a total of $5.9 million
(3%) due to lower  pricing in  Industrial  and Fine  Chemicals  (totaling  $16.2
million).  Partially  offsetting  these sales  declines  were higher  Industrial
volumes  ($8.7  million) and the favorable  impact of the weaker U.S.  dollar in
Europe ($2.5  million).  Market  selling  prices of butanediol  decreased in the
first nine months of 2002  compared  with  average  2001 levels due to weakening
demand and in anticipation of new capacity coming on stream in Europe. Sales for
the  Fine  Chemicals  business  were  unfavorably  impacted  due to the  loss of
Polaroid sales as a result of Polaroid's bankruptcy.

     Operating  income  for  the  Performance  Chemicals,   Fine  Chemicals  and
Industrial  segment was $20.8  million in the first nine months of

                                       26

<PAGE>


     2002  compared  with  $20.0  million  for the  first  nine  months of 2001.
Excluding  the $5.5 million  gain on the sale of the  FineTech  business and the
$6.8 million of gains on contract  settlements,  operating  income for the first
nine  months of 2002 was $8.5  million.  The  decline in  operating  profits was
primarily  attributable to losses in the Fine Chemicals business due to the loss
of Polaroid sales and unfavorable pricing ($3.1 million).  Operating profits for
the Industrial  business were 56% lower for the first nine months of 2002 due to
the impact of unfavorable  pricing ($13.0 million).  Partially  offsetting these
unfavorable factors were favorable manufacturing efficiencies ($4.4 million) due
to consolidation  of our butanediol  production at our Marl,  Germany  facility,
together with lower methanol and natural gas prices. The lower operating profits
from the Fine Chemicals and Industrial  businesses were partially offset by $5.7
million higher operating income in Performance  Chemicals,  primarily reflecting
the profit  contribution from the biocides  business,  and also due to favorable
manufacturing efficiencies and volumes (totaling $2.2 million).

Mineral Products

     Sales for the  Mineral  Products  segment for the first nine months of 2002
were $74.3  million  compared  with $63.8  million  for the first nine months of
2001. The $10.5 million (16%) increase reflected $7.4 million (15%) higher sales
to Building  Materials  Corporation of America,  an affiliate,  and $3.1 million
(23%)  higher third party  sales.  The  increased  sales  reflected  higher unit
volumes ($8.6  million)  resulting  from an increased  market demand for roofing
granules.  We are beginning to experience  competitive  pricing pressures in the
Mineral Products business as a result of additional capacity coming on stream in
the industry.

     Operating income for the first nine months of 2002 was $18.4 million, a 72%
increase  compared  with $10.7  million for the same period in 2001,  reflecting
favorable manufacturing efficiencies and lower natural gas costs ($3.9 million),
as well as the impact of the higher volumes.


Liquidity and Financial Condition

     During the first nine months of 2002, our net cash inflow before  financing
activities  was $79.5 million,  reflecting  $94.7 million of cash generated from
operations,  the  reinvestment  of $42.5  million for capital  programs  and the
acquisition of a Mineral Products manufacturing  facility, and net cash proceeds
of $27.3 million from the sale of the FineTech  business.  Cash generated from a
reduction in working  capital items  totaled $9.1 million  during the first nine
months of 2002,  reflecting a $13.8 million  decrease in inventories  and a $7.4
million net increase in payables and accrued liabilities,  partially offset by a
$10.8 million increase in receivables.  The reduced inventories resulted from an
inventory  reduction  program  and the higher  receivables  resulted  from $16.3
million  higher sales in the third quarter of 2002 versus the fourth  quarter of
2001.

                                       27

<PAGE>

     Net cash used in financing  activities during the first nine months of 2002
totaled  $82.0  million,  primarily  reflecting  an $85.3  million  decrease  in
borrowings  under our bank  revolving  credit  facility  and a $2.7 million call
premium on the  redemption  of debt.  On January  14,  2002,  ISP  redeemed  the
remaining $307.9 million  aggregate  principal amount of its 9% Senior Notes due
2003,  which we refer to as the  "2003  Notes,"  of  which  $182.1  million  was
reflected on our Consolidated Balance Sheet at December 31, 2001. The 2003 Notes
were  redeemed  at a  redemption  price of 101.5% of the  principal  amount plus
accrued and unpaid  interest to the  redemption  date. The redemption was funded
utilizing a restricted cash escrow account which had been established in 2001 in
connection  with  the  issuances  of  long-term  debt.  In  addition,  financing
activities included a $6.9 million capital contribution from our parent company.

     As a result of the foregoing factors,  cash and cash equivalents  decreased
by $1.8 million during the first nine months of 2002 to $9.0 million.

     On July 8, 2002,  ISP announced  that its Board of Directors had received a
letter from Samuel J. Heyman,  ISP's  Chairman of the Board,  proposing that the
Board consider a going private  transaction  whereby  holders of shares of ISP's
common stock (other than those shares  beneficially  owned by Mr.  Heyman) would
receive $10 in cash per share.  Such shares  total  approximately  12.5  million
shares,  or  approximately  19% of  ISP's  outstanding  shares.  ISP's  Board of
Directors formed a Special  Committee of independent  Directors to evaluate this
proposal.  On November 7, 2002, ISP announced that the Special Committee and Mr.
Heyman reached agreement on such transaction  whereby holders of shares of ISP's
common stock (other than Mr. Heyman) would receive $10.30 in cash per share. The
agreement followed a determination by the Special Committee that the transaction
consideration is fair to ISP's public shareholders.  The total consideration for
such shares of  approximately  $130 million  would be paid out of our  available
funds.

     In  December  2001,  we  entered  into  a  letter  agreement  to  sell  our
pharmaceutical fine chemicals business to Pharmaceutical Resources Incorporated,
which we refer to as "PRI,"  including our Haifa,  Israel-based  FineTech,  Ltd.
business and our Columbus,  Ohio  manufacturing  facility.  In February 2002, we
received  a  $250,000  payment  from  PRI  in  consideration  of  extending  the
negotiations pursuant to the letter agreement.  In March 2002, we announced that
the sale would not be consummated  due to the failure of PRI to proceed with the
transaction  in a timely  manner.  Under the terms of the letter  agreement,  we
received a $3.0 million  break-up fee, which was recorded as income in the first
quarter of 2002 (see Note 4 to  Consolidated  Financial  Statements).  Following
negotiations  with PRI, in April 2002, we sold the  Haifa-based  business to PRI
for $32 million.  We recorded a second quarter pre-tax gain, after expenses,  of
$5.5 million related to this sale.

     In April 2002, we acquired the roofing granules manufacturing operations in
Ione,  California  of Reed  Minerals,  a division  of Harsco  Corporation.  In a
related transaction, we also acquired the adjacent quarry operations and certain
mining assets from Hanson Aggregates Mid-


                                       28

<PAGE>


Pacific,  Inc.   The  total  purchase  price   of  the  acquisitions  was  $11.4
million.

     As part of our acquisition of our Freetown, Massachusetts plant in 1998, we
entered into a multi-year agreement to supply the imaging dyes and polymers used
by Polaroid in its instant film  business.  In October 2001,  Polaroid filed for
protection under Chapter 11 of the U.S. Bankruptcy Code. In the third quarter of
2002,  the  majority of  Polaroid's  assets were  acquired by a new owner.  As a
result,  we no longer have a long-term  supply  contract  with  Polaroid.  These
events have  negatively  impacted  the sale of our fine  chemicals  products and
reduced the utilization of our Freetown plant.

     We have an operating lease for a sale-leaseback  transaction related to the
Freetown facility, which was entered into in 1998. The lease had an initial term
of four years and, at our option,  up to three  one-year  renewal  periods.  The
lease  provides for a  substantial  guaranteed  payment by us at the end of each
renewal  period and includes  purchase and return  options at fair market values
determined  at the  inception  of the  lease.  We have the right to  exercise  a
purchase  option with  respect to the leased  facility,  or the  facility can be
returned  to the lessor and sold to a third  party.  We are  obligated  to pay a
maximum  guaranteed  payment  amount upon the return of the facility,  currently
$35.8 million,  reduced by 50% of any proceeds from the  subsequent  sale of the
facility  in  excess  of  $5.2  million.  Under  generally  accepted  accounting
principles,   we  cannot  recognize  this  future  obligation  or  recognize  an
impairment loss relative to the Freetown  facility since, as an operating lease,
the Freetown facility is not carried as a long-lived asset on our balance sheet.
However,  given the current  utilization of the Freetown facility as a result of
the Polaroid bankruptcy, if we should exercise the purchase option at the end of
any future renewal  period or at the  termination of the lease in 2005, we would
anticipate having to recognize a material  impairment  charge.  However,  we are
working  toward  increasing  the  utilization  of the  Freetown  plant  and have
transferred production of certain personal care products to this facility.

     In  August  2001,  the FASB  issued  SFAS No.  143,  "Accounting  for Asset
Retirement  Obligations."  SFAS No. 143  establishes  accounting  and  reporting
standards for legal  obligations  associated  with the  retirement of long-lived
assets that  result  from the  acquisition,  construction,  development  and the
normal  operation of a  long-lived  asset.  SFAS No. 143 requires  that the fair
value of a liability  for an asset  retirement  obligation  be recognized in the
period in which it is incurred.  Upon initial recognition of such liability,  an
entity must  capitalize  the asset  retirement  cost by increasing  the carrying
amount of the related  long-lived asset and subsequently  depreciating the asset
retirement  cost over the  useful  life of the  related  asset.  SFAS No. 143 is
effective  for fiscal  years  beginning  after June 15, 2002,  although  earlier
application is encouraged. We are in the process of assessing the impact of this
Statement on our financial statements.

     In April 2002, the FASB issued SFAS No. 145, "Rescission of FASB Statements
No.  4,  44,  and  64,  Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections."  SFAS No. 145 eliminates the  requirement of SFAS No. 4 that gains
and losses on the early  extinguishments of debt be

                                       29

<PAGE>

recorded  as  an  extraordinary   item  unless  such  gains  and losses meet the
criteria of APB No. 30 for  classification as  extraordinary.  The rescission of
SFAS No. 4 is effective for fiscal years beginning after May 15, 2002,  although
early  application  is  encouraged.  We intend to adopt SFAS No.  145  effective
January 1, 2003,  which will result in our first  quarter  2002  pre-tax loss of
$7.1 million on the early  extinguishment  of debt being  reclassified  to other
expense, net.

     In July  2002,  the  FASB  issued  SFAS  No.  146,  "Accounting  for  Costs
Associated with Exit or Disposal  Activities." SFAS No. 146 addresses  financial
accounting and reporting for costs  associated with exit or disposal  activities
and supercedes Emerging Issues Task Force Issue No. 94-3, "Liability Recognition
for Certain  Employee  Termination  Benefits and Other Costs to Exit an Activity
(including  Certain Costs Incurred in a  Restructuring)."  SFAS No. 146 requires
that a liability  for a cost  associated  with an exit or  disposal  activity be
recognized  when the  liability  is  incurred,  and  concludes  that an entity's
commitment to an exit plan does not by itself create a present  obligation  that
meets the definition of a liability.  This Statement also  establishes that fair
value is the objective of initial measurement of the liability.  SFAS No. 146 is
effective for exit or disposal  activities that are initiated after December 31,
2002, with early application encouraged.  We are in the process of assessing the
impact of this Statement on our financial statements.

     See Note 11 to Consolidated  Financial Statements for information regarding
contingencies.


                                   * * *

Forward-looking Statements

     This   Quarterly   Report  on  Form  10-Q  contains  both   historical  and
forward-looking  statements.  All statements other than statements of historical
fact are, or may be deemed to be, forward-looking  statements within the meaning
of section 27A of the  Securities  Act of 1933 and section 21E of the Securities
Exchange Act of 1934. These forward-looking  statements are only predictions and
generally can be identified  by use of statements  that include  phrases such as
"believe", "expect", "anticipate", "intend", "plan", "foresee" or other words or
phrases of similar import.  Similarly,  statements that describe our objectives,
plans or goals also are forward-looking  statements.  Our operations are subject
to certain  risks and  uncertainties  that could cause actual  results to differ
materially from those  contemplated by the relevant  forward-looking  statement.
The  forward-looking  statements included herein are made only as of the date of
this  Quarterly  Report on Form 10-Q and we undertake no  obligation to publicly
update  such   forward-looking   statements  to  reflect  subsequent  events  or
circumstances.  No assurances can be given that projected results or events will
be achieved.






                                       30

<PAGE>



               ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES
                              ABOUT MARKET RISK

     Reference  is made to  Management's  Discussion  and  Analysis of Financial
Condition  and Results of  Operations in our Annual Report on Form Form 10-K for
the fiscal year ended December 31, 2001,  for a discussion of  "Market-Sensitive
Instruments and Risk  Management." At December 31, 2001 and June 30, 2002, there
were no  equity-related  financial  instruments  employed by us to reduce market
risk.



                       ITEM 4. CONTROLS AND PROCEDURES

     The  Company's  Chief  Executive  Officer and Chief  Financial  Officer are
responsible for the design, maintenance and effectiveness of disclosure controls
and  procedures  (as  defined  in  the  Rules  13a-14(c)  and  15d-14(c)  of the
Securities Exchange Act of 1934).

     The  effectiveness  of the  disclosure  controls and  procedures  have been
evaluated by the Chief Executive  Officer and Chief Financial  Officer within 90
days of the filing  date of this  report.  Based on this  evaluation,  the Chief
Executive Officer and Chief Financial Officer have concluded that the disclosure
controls and  procedures are adequate and effective.

     There have been no  significant  changes in  internal  controls or in other
factors that could  significantly  affect these internal controls  subsequent to
the date of the evaluation in connection  with the preparation of this Quarterly
Report on Form 10-Q.
















                                       31

<PAGE>


                                   PART II


                               OTHER INFORMATION


ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

     Exhibit Number

     99.1      Certification of CEO and CFO pursuant to 18 U.S.C. Section
               1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
               Act of 2002.

(b)  Reports on Form 8-K filed during the current quarter:

     No reports on Form 8-K were filed during the three-month period
     ended September 29, 2002.



























                                       32


<PAGE>


                                  SIGNATURES


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

                               ISP CHEMCO INC.
                               ISP CHEMICALS INC.
                               ISP MINERALS INC.
                               ISP TECHNOLOGIES INC.
                               ISP MANAGEMENT COMPANY, INC.
                               BLUEHALL INCORPORATED
                               VERONA INC.
                               ISP REAL ESTATE COMPANY, INC.
                               ISP FREETOWN FINE CHEMICALS INC.
                               ISP INTERNATIONAL CORP.
                               ISP (PUERTO RICO) INC.
                               ISP ALGINATES INC.
                               ISP ENVIRONMENTAL SERVICES INC.
                               ISP GLOBAL TECHNOLOGIES INC.
                               ISP INVESTMENTS INC.




DATE:  November 13, 2002           BY: /s/ Neal E. Murphy
       -----------------               ------------------

                                       Neal E. Murphy
                                       Senior Vice President and
                                         Chief Financial Officer
                                       (Principal Financial Officer)


DATE:  November 13, 2002           BY: /s/Kenneth M. McHugh
       -----------------               --------------------

                                       Kenneth M. McHugh
                                       Vice President and Controller
                                       (Principal Accounting Officer)







                                       33

<PAGE>


                                  SIGNATURES


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

                        ISP CHEMICALS LLC
                        By: ISP Chemicals Inc., its Sole Member

                        ISP MANAGEMENT LLC
                        By:  ISP Management Company, Inc., its Sole Member

                        ISP MINERALS LLC
                        By:  ISP Minerals Inc., its Sole Member

                        ISP TECHNOLOGIES LLC
                        By:  ISP Technologies Inc., its Sole Member

                        ISP INVESTMENTS LLC
                        By:  ISP Investments Inc., its Sole Member

                        ISP GLOBAL TECHNOLOGIES LLC
                        By:  ISP Global Technologies Inc., its Sole Member


DATE:  November 13, 2002           BY: /s/Neal E. Murphy
       -----------------               -----------------

                                       Neal E. Murphy
                                       Senior Vice President and
                                         Chief Financial Officer
                                       (Principal Financial Officer)


DATE:  November 13, 2002           BY: /s/Kenneth M. McHugh
       -----------------               --------------------

                                       Kenneth M. McHugh
                                       Vice President and Controller
                                       (Principal Accounting Officer)








                                       34

<PAGE>




                                CERTIFICATION


I, Sunil Kumar, certify that:

1. I have reviewed this quarterly report on Form 10-Q of ISP Chemco Inc.;

2. Based  on  my  knowledge, this  quarterly  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 quarterly
report;

3. Based  on  my  knowledge,  the  financial  statements,  and  other  financial
information  included in this quarterly  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 quarterly report;

4. The   registrant's   other  certifying  officer and  I  are  responsible  for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed  such  disclosure  controls  and  procedures 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 quarterly report is being prepared;

b) evaluated  the  effectiveness of  the  registrant's  disclosure  controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c)  presented  in  this  quarterly   report  our   conclusions   about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the  registrant's  board of directors (or persons  performing  the equivalent
function):

a) all  significant  deficiencies  in the design or  operation  of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud,  whether or not material,  that involves  management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's  other certifying  officer and I have indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal

                                       35

<PAGE>

controls  subsequent to the date of our most recent  evaluation,  including
any  corrective  actions with regard to  significant  deficiencies  and material
weaknesses.

Date:   November 13, 2002

 /s/ Sunil Kumar
---------------------------
Name:  Sunil Kumar
Title: President and Chief Executive Officer





























































                                       36

<PAGE>

                               CERTIFICATION


I, Neal E. Murphy, certify that:

1. I have reviewed this quarterly report on Form 10-Q of ISP Chemco Inc.;

2. Based on my knowledge, this quarterly 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 quarterly
report;

3. Based on my knowledge,  the financial  statements,  and other  financial
information  included in this quarterly  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 quarterly report;

4. The  registrant's  other  certifying  officer and I are  responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a) designed such disclosure controls and procedures 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 quarterly report is being prepared;

b) evaluated the effectiveness of the registrant's  disclosure controls and
procedures  as of a date  within  90  days  prior  to the  filing  date  of this
quarterly report (the "Evaluation Date"); and

c)  presented  in  this  quarterly   report  our   conclusions   about  the
effectiveness of the disclosure  controls and procedures based on our evaluation
as of the Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrant's auditors and the audit committee
of the  registrant's  board of directors (or persons  performing  the equivalent
function):

a) all  significant  deficiencies  in the design or  operation  of internal
controls  which  could  adversely  affect  the  registrant's  ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
registrant's auditors any material weaknesses in internal controls; and

b) any fraud,  whether or not material,  that involves  management or other
employees who have a significant role in the registrant's internal controls; and

6. The registrant's  other certifying  officer and I have indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal

                                       37

<PAGE>


controls  subsequent to the date of our most recent  evaluation,  including
any  corrective  actions with regard to  significant  deficiencies  and material
weaknesses.

Date:   November 13, 2002

  s/ Neal E. Murphy
-------------------------------
Name:   Neal E. Murphy
Title:  Senior Vice President and
          Chief Financial Officer

























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