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 27, 1998

                                       OR

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

                        Commission File Number 333-17827

                      INTERNATIONAL SPECIALTY PRODUCTS INC.
             (Exact name of registrant as specified in its charter)


        Delaware                                               51-0376469
(State of Incorporation)                                  (I. R. S. Employer
                                                           Identification No.)

 818 Washington Street, Wilmington, Delaware                     19801
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code           (302) 428-0847


                         Commission File Number 33-44862

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


        Delaware                                              13-3416260
(State of Incorporation)                                  (I. R. S. Employer
                                                           Identification No.)

 Rt. 95 Industrial Area, P. O. Box 37
 Calvert City, Kentucky                                           42029
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code           (502) 395-4165













<PAGE>



                       Commission File Number 33-44862-01

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


        Delaware                                               51-0333795
(State of Incorporation)                                  (I. R. S. Employer
                                                           Identification No.)

 State Highway 146 & Industrial Road
 Texas City, Texas                                               77590
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code           (409) 945-3411

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 6, 1998,  68,769,317 shares of International  Specialty  Products
Inc. common stock (par value $.01 per share) were outstanding.

As of November 6, 1998, ISP Chemicals Inc. and ISP Technologies Inc. each had 10
shares of common stock outstanding. No shares are held by non-affiliates.

As of November 6, 1998,  each of the  additional  registrants  had the number of
shares  outstanding  which is shown on the table  below.  No shares  are held by
non-affiliates.


<PAGE>


                             ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>

                                                                Commission       Address, including zip
                                                                File No./I.R.S   code, and telephone number,
                                                  No. of        Employer         including area code, of
Exact name of registrant as       State of        Shares        Identification   registrant's principal
specified in its charter          Incorporation   Outstanding   No.              executive office
---------------------------       -------------   -----------   --------------   ---------------------------
<S>                               <C>             <C>           <C>              <C>    
ISP (PUERTO RICO) INC.            Delaware            10        33-44862-03/     Mirador de Bairoa
                                                                22-2934561       Calle 27st-14
                                                                                 Caguas, Puerto Rico 00725-8900
                                                                                 (787) 744-3116

ISP ENVIRONMENTAL SERVICES INC.   Delaware            10        33-44862-04/     1361 Alps Road
                                                                51-0333801       Wayne, NJ 07470
                                                                                 (973) 628-3000

ISP FILTERS INC.                  Delaware            10        33-44862-05/     4436 Malone Road
                                                                51-0333796       Memphis, TN 38118
                                                                                 (901) 795-2445

ISP GLOBAL TECHNOLOGIES INC.      Delaware            10        33-44862-06/     818 Washington Street
                                                                51-0333802       Wilmington, DE 19801
                                                                                 (302) 429-7492

ISP INTERNATIONAL CORP.           Delaware            10        33-44862-07/     818 Washington Street
                                                                51-0333734       Wilmington, DE 19801
                                                                                 (302) 429-7493

ISP INVESTMENTS INC.              Delaware            10        33-44862-08/     818 Washington Street
                                                                51-0333803       Wilmington, DE 19801
                                                                                 (302) 429-7496

ISP MANAGEMENT COMPANY, INC.      Delaware            10        33-44862-09/     1361 Alps Road
                                                                51-0333800       Wayne, NJ 07470
                                                                                 (973) 628-3000

ISP MINERAL PRODUCTS INC.         Delaware            10        33-44862-10/     34 Charles Street
                                                                51-0333794       Hagerstown, MD 21740
                                                                                 (301) 733-4000

ISP MINERALS INC.                 Delaware            10        33-44862-11/     Route 116
                                                                51-0333798       Blue Ridge Summit, PA 17214
                                                                                 (717) 794-2184

ISP REAL ESTATE COMPANY, INC.     Delaware             2        33-44862-12/     1361 Alps Road
                                                                22-2886551       Wayne, NJ 07470
                                                                                 (973) 628-3000

ISP REALTY CORPORATION            Delaware           1000       33-44862-13/     1361 Alps Road
                                                                13-2720081       Wayne, NJ 07470
                                                                                 (973) 628-3000

VERONA INC.                       Delaware            100       33-44862-16/     NCNB Plaza, Suite 300
                                                                22-3036319       7 North Laurens Street
                                                                                 Greenville, SC 29601
                                                                                 (803) 271-9194

BLUEHALL INCORPORATED             Delaware             1        33-44862-15/     818 Washington Street
                                                                13-3335905       Wilmington, DE 19801
                                                                                 (302) 651-0165

ISP OPCO HOLDINGS INC.            Delaware           100        333-17827-01/    818 Washington Street
                                                                51-0382622       Wilmington, DE 19801
                                                                                 (302) 429-8641

</TABLE>


<PAGE>


                         Part I - FINANCIAL INFORMATION
                          Item 1 - FINANCIAL STATEMENTS


                      INTERNATIONAL SPECIALTY PRODUCTS INC.

                  CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                      (Thousands, except per share amounts)


                                      Third Quarter Ended   Nine Months Ended
                                      --------------------  ------------------
                                       Sept. 28, Sept. 27,  Sept. 28, Sept. 27,
                                         1997      1998       1997      1998
                                       --------  --------   --------  --------
Net sales............................. $183,600  $206,933   $572,606  $627,411
                                       --------  --------   --------  --------


Costs and expenses:
  Cost of products sold...............  105,861   119,612    336,380   364,530
  Selling, general and administrative.   39,782    43,896    116,274   126,908
  Goodwill amortization...............    3,345     4,062      9,980    10,737
  Merger related and consolidation
    expenses (Note 2) ................        -    13,543          -    13,543
                                       --------  --------   --------  --------
    Total costs and expenses..........  148,988   181,113    462,634   515,718
                                       --------  --------   --------  --------


Operating income......................   34,612    25,820    109,972   111,693
Interest expense......................  (17,975)  (18,884)   (55,505)  (55,877)
Equity in earnings of joint venture...    1,517         -      4,263     1,455
Other income, net.....................   10,414    11,360     23,803    31,061
                                       --------  --------   --------  --------

Income before income taxes............   28,568    18,296     82,533    88,332
Income taxes..........................  (10,548)   (6,904)   (30,128)  (33,036)
Minority interest in income of
  subsidiary..........................   (3,594)   (1,087)   (11,293)  (10,279)
                                       --------  --------   --------  --------

Net income............................ $ 14,426  $ 10,305   $ 41,112  $ 45,017
                                       ========  ========   ========  ========


Earnings per common share:

  Basic............................... $    .27  $    .15   $    .76  $    .77
                                       ========  ========   ========  ========
  Diluted............................. $    .27  $    .15   $    .76  $    .77
                                       ========  ========   ========  ========

Weighted average number of common and
  common equivalent shares outstanding:

  Basic...............................   53,833    66,757     53,833    58,189
                                       ========  ========   ========  ========
  Diluted.............................   53,833    67,473     53,833    58,430
                                       ========  ========   ========  ========

                 See Notes to Consolidated Financial Statements

                                       1


<PAGE>


                      INTERNATIONAL SPECIALTY PRODUCTS INC.

                           CONSOLIDATED BALANCE SHEETS

                                                                 Sept. 27,
                                                  December 31,     1998
                                                      1997     (Unaudited)
                                                  ------------ -----------
                                                         (Thousands)
ASSETS
Current Assets:
  Cash and cash equivalents.....................  $   20,495   $   37,948
  Investments in trading securities.............      67,943       69,362
  Investments in available-for-sale securities..     140,812      193,405
  Investments in held-to-maturity securities....         311       11,917
  Other short-term investments..................      26,682       37,143
  Accounts receivable, trade, net...............      67,077      115,584
  Accounts receivable, other....................      25,288       39,758
  Receivable from related parties, net..........       4,124        2,292
  Inventories...................................     119,910      137,437
  Other current assets..........................      16,773       16,989
                                                  ----------   ----------
Total Current Assets............................     489,415      661,835
Property, plant and equipment, net..............     518,922      599,310
Goodwill, net...................................     409,886      536,972
Other assets....................................      67,457       35,667
                                                  ----------   ----------
Total Assets....................................  $1,485,680   $1,833,784
                                                  ==========   ==========


LIABILITIES AND STOCKHOLDERS' EQUITY 
Current Liabilities:
  Short-term debt...............................  $   39,076   $   37,141
  Current maturities of long-term debt..........         684       38,772
  Accounts payable..............................      46,283       76,833
  Accrued liabilities...........................      74,092      103,117
  Income taxes..................................       7,200       20,224
                                                  ----------   ----------
    Total Current Liabilities...................     167,335      276,087
                                                  ----------   ----------
Long-term debt less current maturities..........     798,762      859,068
                                                  ----------   ----------
Deferred income taxes...........................      67,918       77,597
                                                  ----------   ----------
Other liabilities...............................      63,493       61,755
                                                  ----------   ----------
Minority interest in subsidiary.................     126,331            -
                                                  ----------   ----------

Stockholders' Equity:
  Preferred stock, $.01 par value per share;
    20,000,000 shares authorized:
    no shares issued............................           -            -
  Common stock, $.01 par value per share;
    300,000,000 shares authorized:  53,833,333
    and 69,546,456 shares issued ...............         538          695
  Additional paid-in capital....................     212,413      489,275
  Treasury stock, at cost - 70,874 shares ......           -         (917)
  Retained earnings.............................      40,080       85,097
  Accumulated other comprehensive income (loss).       8,810      (14,873)
                                                  ----------   ----------
    Total Stockholders' Equity..................     261,841      559,277
                                                  ----------   ----------

Total Liabilities and Stockholders' Equity......  $1,485,680   $1,833,784
                                                  ==========   ==========

                 See Notes to Consolidated Financial Statements

                                         2


<PAGE>


                      INTERNATIONAL SPECIALTY PRODUCTS INC.

                CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

                                                            Nine Months Ended
                                                           --------------------
                                                           Sept. 28,  Sept. 27,
                                                              1997       1998
                                                           ---------  --------
                                                               (Thousands)

Cash and cash equivalents, beginning of period...........   $ 17,938  $ 20,495
                                                            --------  --------
Cash provided by operating activities:
  Net income.............................................     41,112    45,017
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation.......................................     30,936    34,790
      Goodwill amortization..............................      9,980    10,737
      Deferred income taxes..............................     23,521    11,272
  Increase in working capital items......................     (6,713)     (217)
  Purchases of trading securities........................   (132,330) (184,465)
  Proceeds from sales of trading securities..............     96,278   194,312
  (Increase) decrease in net receivable from related
    parties..............................................     (2,687)    1,832
  Change in cumulative translation adjustment............     (7,343)    4,070
  Change in minority interest in subsidiary..............     10,113     9,730
  Other, net.............................................      5,530    10,287
                                                            --------  --------

    Net cash provided by operating activities............     68,397   137,365
                                                            --------  --------
Cash provided by (used in) investing activities:
  Capital expenditures and acquisitions..................    (45,834) (141,456)
  Proceeds from sale-leaseback transaction...............          -    56,050
  Proceeds from sale of assets...........................          -     2,400
  Purchases of available-for-sale securities.............   (213,708) (474,195)
  Purchases of held-to-maturity securities...............     (1,623)  (11,917)
  Purchases of other short-term investments..............          -   (10,000)
  Proceeds from sales of available-for-sale securities...    239,317   359,101
  Proceeds from held-to-maturity securities..............      3,075       311
                                                            --------  --------
   Net cash used in investing activities.................    (18,773) (219,706)
                                                            --------  --------

Cash provided by (used in) financing activities:
  Proceeds from sale of accounts receivable..............          -     4,000
  Decrease in short-term debt............................     (5,686)   (1,935)
  Increase (decrease) in borrowings under revolving
    credit facility......................................    (21,425)   98,500
  Repayments of long-term debt...........................       (429)     (496)
  Repurchases of common stock............................    (10,240)   (1,037)
  Other, net.............................................          1       762
                                                            --------  --------
Net cash provided by (used in) financing activities......    (37,779)   99,794
                                                             --------  --------
Net change in cash and cash equivalents..................     11,845    17,453
                                                            --------  --------
Cash and cash equivalents, end of period.................   $ 29,783  $ 37,948
                                                            ========  ========



                                      3


<PAGE>




                      INTERNATIONAL SPECIALTY PRODUCTS INC.
        CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) -- (Continued)


                                                     Nine Months Ended
                                                    --------------------
                                                    Sept. 28,  Sept. 27,
                                                       1997       1998
                                                    ---------  ---------
                                                         (Thousands)

Supplemental Cash Flow Information:
  Cash paid during the period for:
    Interest (net of amount capitalized)........... $ 54,276   $ 59,630
    Income taxes...................................    3,261      9,461

Acquisition of remaining 50% interest in
  GAF-Huls Chemie GmbH joint venture, net of 
  $23,732 cash acquired*:
  Fair market value of assets acquired.............            $ 48,003
  Purchase price of acquisition....................              23,381
                                                               --------
  Liabilities assumed..............................            $ 24,622
                                                               ========

*The  Company had a 50% equity  interest  in the cash held by the joint  venture
prior to the  acquisition,  which  was  classified  within  Other  Assets on the
Consolidated Balance Sheet.


























                 See Notes to Consolidated Financial Statements


                                       4


<PAGE>




                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


     The consolidated financial statements for International  Specialty Products
Inc. (the "Company"),  formerly ISP Holdings Inc. ("ISP Holdings"),  reflect, in
the opinion of  management,  all  adjustments  necessary  to present  fairly the
financial  position of the Company at  September  27,  1998,  and the results of
operations and cash flows for the periods ended September 28, 1997 and September
27, 1998. All  adjustments  are of a normal  recurring  nature.  These financial
statements  should be read in conjunction with the annual  financial  statements
and notes thereto  included in ISP Holdings'  Annual Report on Form 10-K for the
fiscal year ended December 31, 1997 (the "Form 10-K").


Note 1.  Merger of International Specialty Products Inc. into ISP Holdings
         Inc.

     On July 15, 1998,  International Specialty Products Inc. ("Old ISP") merged
(the "Merger") with and into ISP Holdings.  In connection  with the Merger,  ISP
Holdings  changed  its name to  International  Specialty  Products  Inc.  In the
Merger,  each outstanding share of Old ISP's common stock, other than those held
by ISP Holdings,  was  converted  into one share of common stock of the Company,
and the outstanding  shares of ISP Holdings' common stock were converted into an
aggregate of 53,833,333 shares (or approximately  78%) of the outstanding shares
of common stock of the Company.


Note 2.  Merger Related and Consolidation Expenses

     In the third quarter of 1998, the Company incurred $13.5 million of charges
against  operating income related to the Merger and the consolidation of offices
in the Company's European operations. The Merger related expenses consisted of a
$7.9 million charge in connection  with the  termination of ISP Holdings'  stock
appreciation  rights and  preferred  stock  option  programs  and a $2.6 million
charge related to purchase accounting adjustments.


Note 3.  Acquisitions

Effective April 1, 1998, the Company  acquired the remaining 50% interest in its
joint  venture with Huls AG,  GAF-Huls  Chemie GmbH  ("GhC").  GhC consists of a
manufacturing  facility that produces primarily  butanediol and tetrahydrofuran.
As part of the transaction,  the Company also acquired Huls' production facility
that supplies GhC with its primary raw material,  acetylene.  The results of GhC
are included in the Company's financial  statements on a consolidated basis from
the date of  acquisition,  including  sales of $38.8  million for the second and
third quarters of 1998.







                                        5

<PAGE>


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Note 3.  Acquisitions (Continued)

  In  February  1998,  the Company  acquired  Polaroid  Corporation's  Freetown,
Massachusetts fine chemicals facility.  In connection with the acquisition,  the
Company entered into a  sale-leaseback  arrangement of the facility's  equipment
with a third party. The lease has been accounted for as an operating lease, with
an initial term of four years and, at the Company's option, up to three one-year
renewal  periods.  As  part  of the  transaction,  the  Company  entered  into a
long-term supply and license  agreement with Polaroid for the imaging  chemicals
and  polymers  manufactured  at the facility and used by Polaroid in its instant
film business.


Note 4.  Comprehensive Income

     In June 1997, the Financial  Accounting Standards Board (the "FASB") issued
Statement  of  Financial  Accounting  Standards  ("SFAS")  No.  130,  "Reporting
Comprehensive  Income,"  which is  effective  for fiscal years  beginning  after
December 15, 1997.  Reclassification of financial statements for earlier periods
is required.  In the Company's case,  comprehensive  income includes net income,
unrealized gains and losses from investments in  available-for-sale  securities,
foreign currency translation adjustments, and pension liability adjustments.

                                       Third Quarter Ended  Nine Months Ended
                                      --------------------- -------------------
                                      Sept. 28,  Sept. 27,  Sept. 28, Sept. 27,
                                        1997       1998       1997      1998
                                      --------   --------   --------  --------
                                                     (Thousands)
Net income........................... $ 14,426   $ 10,305   $ 41,112  $ 45,017
                                      --------   --------   --------  --------
Other comprehensive income, net of
  tax:
  Unrealized gains (losses)
    on available-for-sale securities:
  Unrealized holding gains (losses)
    arising during the period, net of
    income tax (provision) benefit of
    $866, $10,564, $(1,943), and
    $5,392...........................   (1,499)   (24,938)     3,489   (13,834)
  Less:  reclassification adjustment
   for gains (losses) included in net
   income, net of income tax
   (provision) benefit of $1,118,
   $(260), $(2,145), and $(6,600)....   (2,003)      (692)     4,984    13,723
                                      --------   --------   --------   -------
  Total..............................      504    (24,246)    (1,495)  (27,557)
  Foreign currency translation
   adjustment........................     (852)     7,354     (6,726)   (4,070)
  Minimum pension liability
   adjustment........................        -          -         83         -
  Effect of the Merger on components
    of accumulated other
    comprehensive income (loss)......        -       (196)         -      (196)
                                      --------   --------   --------   -------
Total other comprehensive income
 (loss)..............................     (348)   (17,088)    (8,138)  (23,683)
                                      --------   --------   --------  --------
Comprehensive income (loss).......... $ 14,078   $ (6,783)  $ 32,974  $ 21,334
                                      ========   ========   ========  ========
                                               6

<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Note 4.  Comprehensive Income (Continued)

     Changes  in the  components  of  "Accumulated  other  comprehensive  income
(loss)" for the nine months ended September 27, 1998 are as follows:

                            Unrealized
                            Gains       Cumulative
                            (Losses)on  Foreign     Minimum    Accumulated
                            Available-  Currency    Pension    Other
                            for-sale    Translation Liability  Comprehensive
                            Securities  Adjustment  Adjustment Income (Loss)
                            ----------  ----------- ---------- -------------
                                             (Thousands)
Balance, December 31, 1997.. $  8,007    $  1,385    $   (582)   $  8,810
Change for the period.......  (27,273)      3,701        (111)    (23,683)
                             --------    --------    --------    --------
Balance, September 27, 1998. $(19,266)   $  5,086    $   (693)   $(14,873)
                             ========    ========    ========    ========


Note 5.  Earnings per Common Share

     Earnings per share data for all periods prior to the Merger are  calculated
based  on the  53,833,333  shares  of the  Company's  common  stock  held by ISP
Holdings'  stockholders.  For periods subsequent to the Merger,  "Basic Earnings
per Share" are calculated  based on the total weighted  average number of shares
of the Company's common stock outstanding  during the period.  "Diluted Earnings
per Share" for periods  subsequent  to the Merger  give effect to all  potential
dilutive common shares  outstanding  during the period under the Company's stock
option plan.


Note 6.  Inventories

     Inventories comprise the following:

                                       December 31,   Sept. 27,
                                          1997          1998
                                       ------------   ---------
                                              (Thousands)
     Finished goods................     $ 84,912      $ 85,658
     Work in process...............       20,088        27,553
     Raw materials and supplies....       18,408        26,569
                                        --------      --------
     Total.........................      123,408       139,780
     Less LIFO reserve.............       (3,498)       (2,343)
                                        --------      --------

     Inventories...................     $119,910      $137,437
                                        ========      ========






                                        7


<PAGE>


             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


Note 7.  Long-term Debt

     The Company intends to refinance its $200 million 9% Senior Notes due March
1999;  accordingly,   such  notes  are  classified  as  long-term  debt  on  the
Consolidated Balance Sheet.


Note 8.  New Accounting Standard

     In June 1998,  the FASB  issued SFAS No. 133,  "Accounting  for  Derivative
Instruments and Hedging  Activities."  SFAS No. 133  establishes  accounting and
reporting  standards  requiring that every derivative  instrument be recorded in
the balance  sheet as either an asset or  liability  measured at its fair value.
SFAS No. 133 requires that changes in the derivative's  fair value be recognized
currently in earnings unless specific hedge accounting criteria are met. Special
accounting  for  qualifying  hedges  allows a  derivative's  gains and losses to
offset related results on the hedged item in the income statement.

     SFAS No. 133 is effective for fiscal years  beginning  after June 15, 1999,
but may be adopted  earlier.  The Company has not yet  determined  the effect of
adoption of SFAS No. 133 and has not determined the timing or method of adoption
of the statement. Adoption of SFAS No. 133 could increase volatility in earnings
and other comprehensive income.


Note 9.  Contingencies

Environmental Litigation

     The  Company,  together  with other  companies,  is a party to a variety of
proceedings  and  lawsuits  involving   environmental  matters   ("Environmental
Claims"),  in which  recovery is sought for the cost of cleanup of  contaminated
sites,  a number of which  Environmental  Claims are in the early stages or have
been dormant for protracted periods.

     In  the  opinion  of  the  Company's  management,  the  resolution  of  the
Environmental  Claims  should  not be  material  to  the  business,  results  of
operations or financial position of the Company.  However,  adverse decisions or
events, particularly as to 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 such 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 13 to Consolidated Financial Statements contained in the Form 10-K.








                                      8
<PAGE>

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)


NOTE 9.   Contingencies (Continued)

Tax Claim against GAF

     Certain  subsidiaries  of the Company were  members of the GAF  Corporation
("GAF")  consolidated  Federal  income tax group (the "GAF  Group") in 1990 and,
accordingly, would be severally liable for any tax liability of the GAF Group in
respect of such year.  Effective as of January 1, 1997,  neither the Company nor
any of its subsidiaries are members of the GAF Group.

     On  September  15, 1997,  GAF  received a notice from the Internal  Revenue
Service (the  "Service") 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 a  subsidiary  of GAF,  GAF  Fiberglass
Corporation  ("GFC"),  holds an interest.  The claim of the Service for interest
and penalties,  after taking into account the effect on the use of net operating
losses and  foreign  tax  credits,  could  result in GFC  incurring  liabilities
significantly in excess of the deferred tax liability of $131.4 million that GAF
recorded in 1990 in  connection  with this  matter.  GAF has advised the Company
that it believes that GFC will prevail in this matter,  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.  GAF and certain  subsidiaries  of GAF have
agreed to jointly and severally  indemnify the Company against any tax liability
associated  with  the  surfactants  partnership,  which  the  Company  would  be
severally liable for, together with GAF and several  subsidiaries of GAF, should
GFC be unable to satisfy such liability.


























                                    9


<PAGE>



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

Results of Operations - Third Quarter 1998 Compared With
                        Third Quarter 1997

     The Company recorded third quarter 1998 net income of $10.3 million
(15 cents  diluted  earnings per share)  versus $14.4  million (27 cents diluted
earnings  per share) in the third  quarter of 1997.  The  results  for the third
quarter of 1998 reflect $13.5 million of pre-tax  charges  related to the Merger
and the consolidation of offices in the Company's European  operations (see Note
2 to Consolidated Financial Statements).  Excluding the effect of these charges,
the Company's  results  reflected higher  operating and other income,  partially
offset by increased interest expense.

      Net  sales for the  third  quarter  of 1998  were  $206.9  million,  a 13%
increase  compared  with  $183.6  million  for the third  quarter  of 1997.  The
increase in sales was  attributable to increased sales volumes,  principally due
to the  acquisitions  of GhC  and the  Freetown,  Massachusetts  fine  chemicals
facility (see Note 3 to  Consolidated  Financial  Statements),  and, to a lesser
extent,  also  reflected  a $2.5  million  (11%)  increase  in sales of  mineral
products due to increased  sales volumes,  partially  offset by the  unfavorable
effect of the stronger U.S. dollar relative to other currencies in certain areas
of the world ($1.9 million). The sales growth in the third quarter resulted from
higher  sales of fine  chemicals  and  mineral  products  in the United  States,
partially offset by lower sales in the Asia-Pacific region.

     Operating  income for the third quarter of 1998 was $25.8 million  compared
with last year's $34.6 million.  Excluding  $13.5 million of charges  related to
the Merger and  consolidation,  operating  income for the third  quarter of 1998
increased $4.8 million (14%), resulting principally from the acquisitions of GhC
and the Freetown, Massachusetts fine chemicals facility, partially offset by the
impact of the  stronger  U.S.  dollar  and lower  gross  margins  for  specialty
chemicals.  Operating  income for the mineral products  business  increased $1.4
million  (28%) as a result of the higher  sales  levels and higher  gross profit
margins.

     Interest  expense for the third  quarter  increased  to $18.9  million from
$18.0  million in the third  quarter of 1997,  primarily  due to higher  average
borrowings.  Other income,  net, for the third quarter of 1998 was $11.4 million
compared with $10.4 million in the third quarter of 1997, principally reflecting
higher investment income.














                                       10


<PAGE>



Results of Operations -- Nine Months 1998 Compared With
                         Nine Months 1997

     For the first nine months of 1998, the Company recorded net income of
$45.0 million (77 cents diluted  earnings per share) compared with $41.1 million
(76 cents diluted  earnings per share),  for the first nine months of 1997.  The
results  for the first  nine  months of 1998  reflect  $13.5  million of pre-tax
charges related to the Merger and the  consolidation of offices in the Company's
European operations (see Note 2 to Consolidated Financial Statements). Excluding
the effect of these charges,  the Company's  results  reflected higher operating
and other income, partially offset by slightly higher interest expense and lower
equity income due to the GhC acquisition.

     Net sales for the first nine  months of 1998 were $627.4  million  compared
with net sales of $572.6 million for the same period in 1997,  with the increase
attributable to increased sales volumes,  principally due to the acquisitions of
GhC and the Freetown,  Massachusettes fine chemicals facility,  and, to a lesser
extent, higher sales of mineral products (up $6.3 million),  partially offset by
the  unfavorable  effect of the stronger U.S.  dollar ($11.5  million).  The 10%
increase  in  mineral  products  was due to  increased  sales  volumes  (up $5.7
million) and, to a lesser extent,  favorable pricing.  The sales growth resulted
from higher sales of fine  chemicals and mineral  products in the United States,
partially offset by lower sales in the Asia-Pacific region.

     Operating  income  for the first  nine  months of 1998 was  $111.7  million
compared  with $110.0  million in the first nine months of 1997.  Excluding  the
$13.5  million of charges  related  to the Merger and  consolidation,  operating
income  for the  first  nine  months  increased  $15.2  million  (14%) to $125.2
million, with the increase primarily attributable to the acquisitions of GhC and
the Freetown,  Massachusetts  fine chemicals  facility,  partially offset by the
adverse  effect of the  stronger  U.S.  dollar in certain  regions of the world.
Operating income for the mineral products business  increased $2.0 million (14%)
due to the higher sales levels and improved gross profit margins.

     Interest  expense  for the first  nine  months  of 1998 was  $55.9  million
compared  with $55.5  million in the same period in 1997,  with the increase due
primarily to higher average  borrowings.  Other income,  net, for the first nine
months  of 1998 was  $31.1  million  compared  with  $23.8  million  last  year,
principally  reflecting  higher investment  income,  partially offset by foreign
exchange losses.


Liquidity and Financial Condition

     During the first nine months of 1998, the Company's net cash outflow before
financing  activities  was  $82.3  million,  including  $137.4  million  of cash
generated  from  operations,  the  reinvestment  of $141.5  million  for capital
programs  and  acquisitions  (see  below  and Note 3 to  Consolidated  Financial
Statements), $56.1 million of cash generated from a sale-leaseback related to an
acquisition,  and the  use of  $136.7  million  of cash  for  net  purchases  of
available-for-sale   and   held-to-maturity   securities  and  other  short-term
investments.


                                        11

<PAGE>

     Cash from operations reflected a $9.8 million cash inflow from net sales of
trading securities and also included $6.1 million of dividends received from the
GhC joint venture prior to the Company's  acquisition of the remaining  interest
in GhC. Working capital increased by $0.2 million,  primarily reflecting a $48.8
million  increase in receivables  due to $27.9 million higher sales in September
1998 versus  December 1997 and an increase in the receivable  from the purchaser
of the Company's domestic trade accounts receivable, and a $9.4 million increase
in  inventories,  offset by a $58.1  million  increase in  payables  and accrued
liabilities.

     Net cash provided by financing  activities in the first nine months of 1998
totaled $99.8 million,  mainly reflecting a $98.5 million increase in borrowings
under the Company's bank  revolving  credit  facility and $4.0 million  proceeds
from the sale of the Company's accounts  receivable,  partially offset by a $1.9
million  reduction in short-term  borrowings  and $1.0 million of repurchases of
common stock pursuant to the Company's repurchase program. The Company announced
in September  1998 that its Board of Directors had approved the repurchase of an
additional one million shares of its common stock. This amount is in addition to
a share  repurchase  program of one million  shares,  announced in October 1996,
which is expected to be completed  shortly.  The repurchased shares will be held
for general purposes, including the issuance of shares under the Company's stock
option plan.

     As a result of the foregoing factors,  cash and cash equivalents  increased
by  $17.5  million  during  the  first  nine  months  of 1998 to  $37.9  million
(excluding $311.8 million of trading,  available-for-sale  and  held-to-maturity
securities and other short-term investments).

     As of September 27, 1998, the Company's  scheduled  repayments of long-term
debt for the twelve months ending  September 30, 1999 aggregated  $38.8 million,
excluding $200 million relating to the Company's 9% Senior Notes due March 1999.
The Company  intends to refinance the 9% Senior Notes;  accordingly,  such notes
are classified as long-term debt on the Consolidated Balance Sheet.

     In February 1998, the Company  acquired  Polaroid  Corporation's  Freetown,
Massachusetts fine chemicals facility.  In connection with the acquisition,  the
Company entered into a  sale-leaseback  arrangement of the facility's  equipment
with a third party. The lease has been accounted for as an operating lease, with
an initial term of four years and, at the Company's option, up to three one-year
renewal  periods.  As  part  of the  transaction,  the  Company  entered  into a
long-term supply and license  agreement with Polaroid for the imaging  chemicals
and  polymers  manufactured  at the facility and used by Polaroid in its instant
film business.

     Effective April 1, 1998, the Company acquired the remaining 50% interest in
the GhC joint  venture.  As part of the  transaction,  the Company also acquired
Huls'  production  facility  that  supplies  GhC with its primary raw  material,
acetylene. See Note 3 to Consolidated Financial Statements.

     On July 15, 1998,  Old ISP merged with and into the Company.  See Note 1 to
Consolidated Financial Statements.



                                        12


<PAGE>




     On July 22, 1998, the Company filed a shelf Registration  Statement on Form
S-3 with the U.S.  Securities and Exchange Commission for $1 billion of debt and
equity  securities.  In addition to debt  refinancing,  the net  proceeds of any
offering,  if  consummated,  are  expected  to be  used  for  general  corporate
purposes.

     See Note 9 to Consolidated  Financial Statements for information  regarding
contingencies.


Year 2000 Compliance

     The Company has  implemented  a formal  Year 2000  program  (the "Year 2000
Program")  to (i) address  its Year 2000 issues  (i.e.,  the  inability  of some
information  technology  ("IT") and "non-IT"  equipment,  including devices with
embedded technology, to accurately read and process certain dates, including all
dates  in  the  Year  2000  and  afterwards)  (the  "Year  2000  Issues");  (ii)
investigate  Year 2000  Issues of third  parties  significant  to the  Company's
business; and (iii) establish contingency plans where appropriate.

     The Company is in the final stages of installing a new Enterprise  Resource
Planning  System  ("ERP  System")  and has  replaced or  remediated  most of its
personal  computers  and other IT  equipment  that may have  Year  2000  Issues.
Although the ERP System was implemented for purposes other than remediating Year
2000 Issues,  management  believes  that the ERP System is Year 2000  compliant.
With  respect to its non-IT  equipment,  the  Company  and its  consultants  are
presently inventorying,  evaluating, remediating and testing this equipment. The
Company expects to complete its Year 2000 Program for IT and non-IT equipment by
mid-1999.

     The Company is also requesting information on the Year 2000 Issues of third
parties  significant  to the Company's  business.  The Company is evaluating the
responses  from many of these  entities and is requesting  more  information  as
appropriate.  Based on the information  gathered from its Year 2000 Program, the
Company is  developing  contingency  plans to  minimize  the impact of Year 2000
Issues on its business.  The Company  expects to  substantially  complete  these
activities by mid-1999.

     The Company  does not believe  that the costs of its Year 2000 Program will
be  material  to its  financial  position  or results of  operations.  While the
Company believes that it addressed most of its IT Year 2000 Issues by installing
the ERP System and  replacing or  remediating  personal  computers,  neither the
timing nor extent of these  activities  were  directly  related to the Company's
Year 2000 Program.  The Company also has incurred outside costs of approximately
$100,000  in  connection  with  evaluating  Year 2000  compliance  of its non-IT
systems.  The Company expects that the source of any funds that may be necessary
to pay the costs of  addressing  its Year 2000 Issues will be provided from cash
balances or cash generated from  operations.  The Company intends to charge such
costs against earnings or a depreciating capital account, as the case may be, as
the costs are incurred.





                                        13

<PAGE>



     Management  believes that it has taken  reasonable  steps in developing its
Year 2000 Program. Notwithstanding these actions, there can be no assurance that
all of the  Company's  Year 2000 Issues or those of its key  suppliers,  service
providers or customers will be resolved or addressed  satisfactorily  before the
Year  2000  commences.  If  the  Company's  key  suppliers,  service  providers,
customers and other third  parties fail to address  their Year 2000 Issues,  and
there are no  alternates  available to the  Company,  then the  Company's  usual
channels  of supply and  distribution  could be  disrupted,  in which  event the
Company could experience a material  adverse impact on its business,  results of
operations or financial position.


Forward-looking Statements

     This Form 10-Q may contain certain "forward-looking statements" intended to
qualify for the safe harbor from liability established by the Private Securities
Litigation Reform Act of 1995. These forward-looking statements generally can be
identified by use of statements  that include phrases such as the Company or its
management "believes," "expects,"  "anticipates," "intends," "plans," "foresees"
or other words or phrases of similar import. Similarly, statements that describe
the Company's  objectives,  plans or goals also are forward-looking  statements.
All  such   forward-looking   statements   are  subject  to  certain  risks  and
uncertainties  that could cause actual results to differ  materially  from those
contemplated by the relevant forward-looking statement. Stockholders,  investors
and other readers are urged to consider  these  factors  carefully in evaluating
the forward-looking  statements.  The forward-looking statements included herein
are made  only as of the date of this Form 10-Q and the  Company  undertakes  no
obligation  to  publicly  update  such  forward-looking  statements  to  reflect
subsequent events or circumstances.



























                                      14
<PAGE>

                                     PART II


                                OTHER INFORMATION


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

     At the Annual Meeting of Stockholders of Old ISP held on July 15, 1998, the
Merger was approved,  with 92,512,253 votes in favor,  102,512 votes against and
8,087  abstentions;  the proposed  amendment to the 1991  Incentive Plan for Key
Employees and Directors was approved,  with 84,277,312 votes in favor, 8,328,976
votes against and 16,564 abstentions; and each nominated director was reelected,
with at least  91,934,256  votes in favor of, and not more than 2,619,763  votes
withheld from, each nominee.



Item 5.  Other Information

     The Securities and Exchange Commission has recently amended Rules 14a-4 and
14a-5  promulgated  under the  Securities  Exchange Act of 1934, as amended (the
"1934  Act"),  in respect of the  Company's  exercise  of  discretionary  voting
authority in connection with annual stockholder meetings, and in particular with
respect to matters not submitted in  accordance  with the  stockholder  proposal
rule set forth in Rule 14a-8 under the 1934 Act. Under the amended  Rules,  with
respect to a  stockholder  proposal  submitted  outside of the processes of Rule
14a-8 for which notice is not received by the Company at its principal executive
offices  prior to February 26, 1999,  the proxy to be solicited on behalf of the
Company's   Board  of  Directors   for  the  1999  Annual   Meeting  may  confer
discretionary  authority to vote on any such proposal properly coming before the
1999 Annual Meeting.



Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

     27 - Financial  Data  Schedule,  which is submitted  electronically  to the
          Securities and Exchange Commission for information only.

     (b) The Company filed a Report on Form 8-K, dated August 5, 1998, reporting
         events under Items 5 and 7 thereof.











                                         15


<PAGE>


                                   SIGNATURES



     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, each of the Registrants  listed below has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.


                                         INTERNATIONAL SPECIALTY PRODUCTS INC.
                                         ISP CHEMICALS INC.
                                         ISP TECHNOLOGIES INC.
                                         ISP (PUERTO RICO) INC.
                                         ISP ENVIRONMENTAL SERVICES INC.
                                         ISP FILTERS INC.
                                         ISP GLOBAL TECHNOLOGIES INC.
                                         ISP INTERNATIONAL CORP.
                                         ISP INVESTMENTS INC.
                                         ISP MANAGEMENT COMPANY, INC.
                                         ISP MINERAL PRODUCTS INC.
                                         ISP MINERALS INC.
                                         ISP REAL ESTATE COMPANY, INC.
                                         ISP REALTY CORPORATION
                                         VERONA INC.
                                         BLUEHALL INCORPORATED
                                         ISP OPCO HOLDINGS INC.


DATE:  November 10, 1998          BY:  /s/Randall R. Lay
       -----------------              -----------------

                                       Randall R. Lay
                                       Vice President and
                                         Chief Financial Officer
                                       (Principal Financial and
                                         Accounting Officer)




















                                         16

<PAGE>