UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 1-5263
 THE LUBRIZOL CORPORATION
  Ohio
(State or other jurisdiction of 
incorporation or organization)
    
    34-0367600
(I.R.S.Employer
Identification No.)
 
 
  þ o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



THE LUBRIZOL CORPORATION  Quarterly Report on Form 10-Q  Three and Six Months Ended June 30, 2008
 Table of Contents
 Page NumberPART I. FINANCIAL INFORMATIONItem 1
    
    Financial Statements (unaudited)
    
    
    3Consolidated Statements of Income
    
    
    3Consolidated Balance Sheets
    
    
    4Consolidated Statements of Cash Flows
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21Item 3
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    40Item 4
    
    Controls and Procedures
    
    
    41PART II. OTHER INFORMATIONItem 1A
    
    Risk Factors
    
    
    42Item 2
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    42Item 4
    
    Submission of Matters to a Vote of Security Holders
    
    
    43Item 6
    
    Exhibits
    
    
    44Signatures
    
    
    44
  -2-




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##### 



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 THE LUBRIZOL CORPORATION
 
 
 Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,(In Millions Except Per Share Data)
    
    2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues
    
    $
    1,350.2
    
    
    $
    1,154.6
    
    
    $
    2,577.5
    
    
    $
    2,231.3Cost of sales
    
    
    1,044.7
    
    
    
    858.8
    
    
    
    1,979.2
    
    
    
    1,657.1Gross profit
    
    
    305.5
    
    
    
    295.8
    
    
    
    598.3
    
    
    
    574.2Selling and administrative expenses
    
    
    101.9
    
    
    
    103.4
    
    
    
    210.5
    
    
    
    205.7Research, testing and development expenses
    
    
    55.7
    
    
    
    53.7
    
    
    
    109.8
    
    
    
    105.4Amortization of intangible assets
    
    
    7.0
    
    
    
    5.9
    
    
    
    14.0
    
    
    
    11.9Restructuring and impairment charges
(credits)
    
    
    14.6
    
    
    
    0.9
    
    
    
    19.4
    
    
    
    (1.5
    )Other (income) expense-net
    
    
    (1.4
    )
    
    
    1.5
    
    
    
    (3.9
    )
    
    
    (4.2
    )Interest income
    
    
    (3.1
    )
    
    
    (6.9
    )
    
    
    (7.3
    )
    
    
    (14.0
    )Interest expense
    
    
    20.7
    
    
    
    24.4
    
    
    
    38.6
    
    
    
    48.6Income before income taxes
    
    
    110.1
    
    
    
    112.9
    
    
    
    217.2
    
    
    
    222.3Provision for income taxes
    
    
    32.0
    
    
    
    31.9
    
    
    
    65.5
    
    
    
    70.0Net income
    
    $
    78.1
    
    
    $
    81.0
    
    
    $
    151.7
    
    
    $
    152.3Net income per share, basic
    
    $
    1.14
    
    
    $
    1.17
    
    
    $
    2.22
    
    
    $
    2.20Net income per share, diluted
    
    $
    1.13
    
    
    $
    1.15
    
    
    $
    2.19
    
    
    $
    2.17Dividends paid per share
    
    $
    0.31
    
    
    $
    0.30
    
    
    $
    0.61
    
    
    $
    0.56
 Amounts shown are unaudited.
 See accompanying notes to the financial statements.
 -3-




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##### 



THE LUBRIZOL CORPORATION
 
 
 June 30,
    
    
    December 31,(In Millions Except Share Data)
    
    2008
    
    
    2007ASSETSCash and
short-term investments
    
    $
    420.1
    
    
    $
    502.3Receivables
    
    
    819.3
    
    
    
    665.9Inventories
    
    
    652.2
    
    
    
    600.0Other current assets
    
    
    88.7
    
    
    
    79.1Total current assets
    
    
    1,980.3
    
    
    
    1,847.3Property and equipment  at cost
    
    
    2,883.5
    
    
    
    2,763.2Less accumulated depreciation
    
    
    1,695.6
    
    
    
    1,601.7Property and equipment-net
    
    
    1,187.9
    
    
    
    1,161.5Goodwill
    
    
    1,193.7
    
    
    
    1,170.8Intangible assets-net
    
    
    376.5
    
    
    
    381.3Investments in non-consolidated companies
    
    
    7.1
    
    
    
    8.3Other assets
    
    
    69.7
    
    
    
    74.6TOTAL
    
    $
    4,815.2
    
    
    $
    4,643.8LIABILITIES AND SHAREHOLDERS EQUITYShort-term debt and current portion of long-term debt
    
    $
    202.7
    
    
    $
    204.9Accounts payable
    
    
    475.7
    
    
    
    404.8Accrued expenses and other current liabilities
    
    
    235.2
    
    
    
    275.0Total current liabilities
    
    
    913.6
    
    
    
    884.7Long-term debt
    
    
    1,227.6
    
    
    
    1,223.9Pension obligations
    
    
    202.5
    
    
    
    195.2Other postretirement benefit obligations
    
    
    94.2
    
    
    
    93.1Noncurrent liabilities
    
    
    143.3
    
    
    
    147.7Deferred income taxes
    
    
    86.0
    
    
    
    85.5Total liabilities
    
    
    2,667.2
    
    
    
    2,630.1Minority interest in consolidated companies
    
    
    63.6
    
    
    
    62.4Preferred stock without par value  unissuedCommon shares without par value:Authorized  120,000,000 shares

Outstanding  67,701,995 shares as of June 30, 2008 after deducting

18,493,899 treasury shares; 68,383,833 shares at December 31, 2007

after deducting 17,812,061 treasury shares
    
    
    764.3
    
    
    
    763.6Retained earnings
    
    
    1,189.9
    
    
    
    1,128.7Accumulated other comprehensive income
    
    
    130.2
    
    
    
    59.0Total shareholders equity
    
    
    2,084.4
    
    
    
    1,951.3TOTAL
    
    $
    4,815.2
    
    
    $
    4,643.8
 Amounts shown are unaudited.
 See accompanying notes to the financial statements.
 -4-




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##### 



THE LUBRIZOL CORORATION
 
 
 Six Months EndedJune 30,(In Millions)
    
    2008
    
    
    2007CASH PROVIDED BY (USED FOR):OPERATING ACTIVITIESNet income
    
    $
    151.7
    
    
    $
    152.3Adjustments to reconcile net income to cash provided by
operating activities:Depreciation and amortization
    
    
    84.2
    
    
    
    78.8Deferred income taxes
    
    
    (3.6
    )
    
    
    19.1Deferred compensation
    
    
    5.9
    
    
    
    11.9Restructuring and impairment charges
    
    
    14.9
    
    
    
    0.8Gain from sales of property and equipment
    
    
    (0.1
    )
    
    
    (8.0
    )Change in current assets and liabilities, net of acquisitions:Receivables
    
    
    (141.7
    )
    
    
    (71.7
    )Inventories
    
    
    (38.1
    )
    
    
    47.7Accounts payable, accrued expenses and other current liabilities
    
    
    25.1
    
    
    
    (2.3
    )Other current assets
    
    
    (3.9
    )
    
    
    2.2(158.6
    )
    
    
    (24.1
    )Change in noncurrent liabilities
    
    
    (2.4
    )
    
    
    (5.4
    )Other items-net
    
    
    3.5
    
    
    
    1.8Total operating activities
    
    
    95.5
    
    
    
    227.2INVESTING ACTIVITIESCapital expenditures
    
    
    (97.6
    )
    
    
    (75.8
    )Acquisitions
    
    
    0.9
    
    
    
    (15.7
    )Net proceeds from sales of property and equipment
    
    
    0.3
    
    
    
    12.1Other items  net
    
    
    
    
    
    
    (1.3
    )Total investing activities
    
    
    (96.4
    )
    
    
    (80.7
    )FINANCING ACTIVITIESChanges in short-term debt-net
    
    
    
    
    
    
    2.3Repayments of long-term debt
    
    
    
    
    
    
    (79.4
    )Dividends paid
    
    
    (41.6
    )
    
    
    (38.8
    )Common shares purchased
    
    
    (50.1
    )
    
    
    (50.1
    )Proceeds from the exercise of stock options
    
    
    3.0
    
    
    
    24.9Tax benefit from the exercise of stock options and awards
    
    
    2.0
    
    
    
    8.0Total financing activities
    
    
    (86.7
    )
    
    
    (133.1
    )Effect of exchange rate changes on cash
    
    
    5.4
    
    
    
    3.5Net (decrease) increase in cash and short-term investments
    
    
    (82.2
    )
    
    
    16.9Cash and short-term investments at the beginning of period
    
    
    502.3
    
    
    
    575.7Cash and short-term investments at the end of period
    
    $
    420.1
    
    
    $
    592.6
 Amounts shown are unaudited.
 See accompanying notes to the financial statements.
 -5-




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##### 



THE LUBRIZOL CORPORATION
 
 Notes to Consolidated Financial Statements
 Three and Six Months Ended June 30, 2008 and 2007
   1. Basis of Presentation
   2. Significant Accounting Policies
 Net Income Per Share
  Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Numerator:Net income
    
    $
    78.1
    
    
    $
    81.0
    
    
    $
    151.7
    
    
    $
    152.3Denominator (in millions of shares):Weighted-average common shares outstanding
    
    
    68.3
    
    
    
    69.4
    
    
    
    68.4
    
    
    
    69.4Dilutive effect of stock options and awards
    
    
    0.8
    
    
    
    0.8
    
    
    
    0.8
    
    
    
    0.8Denominator for net income per share, diluted
    
    
    69.1
    
    
    
    70.2
    
    
    
    69.2
    
    
    
    70.2Net income per share, basic
    
    $
    1.14
    
    
    $
    1.17
    
    
    $
    2.22
    
    
    $
    2.20Net income per share, diluted
    
    $
    1.13
    
    
    $
    1.15
    
    
    $
    2.19
    
    
    $
    2.17
  -6-




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THE LUBRIZOL CORPORATION  Notes to Consolidated Financial Statements  Three and Six Months Ended June 30, 2008 and 2007
 New Accounting Standards
     -7-




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##### 



THE LUBRIZOL CORPORATION  Notes to Consolidated Financial Statements  Three and Six Months Ended June 30, 2008 and 2007
   Use of Estimates
  Reclassifications
  3. Stock-Based Compensation
  -8-




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##### 



THE LUBRIZOL CORPORATION  Notes to Consolidated Financial Statements  Three and Six Months Ended June 30, 2008 and 2007
  Six Months EndedJune 30,2008
    
    2007Risk-free interest rate
    
    
    3.5
    %
    
    
    4.8
    %Dividend yield
    
    
    2.1
    %
    
    
    2.0
    %Expected volatility
    
    
    20.0
    %
    
    
    17.8
    %Expected life (years)
    
    
    6.5
    
    
    
    10.0Weighted-average fair value per share
of options granted during the period
    
    $
    12.27
    
    
    $
    14.68
    -9-




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##### 



THE LUBRIZOL CORPORATION  Notes to Consolidated Financial Statements  Three and Six Months Ended June 30, 2008 and 2007
  Fair MarketExpected
    
    Value ofNumber of Common
    
    Common SharesAward
    
    Shares to be Issued
    
    on Date of Grant20062008
    
    
    286,018
    
    
    $
    43.0720072009
    
    
    252,744
    
    
    $
    53.0720082010
    
    
    116,990
    
    
    $
    58.45Performance-based share awards at June 30, 2008 and changes during the six months ended June 30,
2008 were as follows:Weighted-AverageGrant DateShare
    
    Fair ValueUnits
    
    Per ShareNonvested at January 1, 2008
    
    
    543,998
    
    
    $
    47.76Granted
    
    
    116,990
    
    
    $
    58.45Performance increase
    
    
    
    
    
    $
    Vested
    
    
    
    
    
    $
    Forfeited
    
    
    (5,236
    )
    
    $
    48.04Nonvested at June 30, 2008
    
    
    655,752
    
    
    $
    49.67
   4. Acquisitions
  -10-




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THE LUBRIZOL CORPORATION  Notes to Consolidated Financial Statements  Three and Six Months Ended June 30, 2008 and 2007
    5. Inventories
  June 30,
    
    
    December 31,2008
    
    
    2007Finished products
    
    $
    366.8
    
    
    $
    332.7Products in process
    
    
    99.7
    
    
    
    105.0Raw materials
    
    
    151.0
    
    
    
    132.2Supplies and engine test parts
    
    
    34.7
    
    
    
    30.1Total inventories
    
    $
    652.2
    
    
    $
    600.0
 6. Goodwill and Intangible Assets
  -11-




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##### 



THE LUBRIZOL CORPORATION  Notes to Consolidated Financial Statements  Three and Six Months Ended June 30, 2008 and 2007
  LubrizolAdvanced
    
    
    LubrizolMaterials
    
    
    Additives
    
    
    TotalBalance, January 1, 2008
    
    $
    1,010.9
    
    
    $
    159.9
    
    
    $
    1,170.8Translation and other adjustments
    
    
    22.7
    
    
    
    0.2
    
    
    
    22.9Balance, June 30, 2008
    
    $
    1,033.6
    
    
    $
    160.1
    
    
    $
    1,193.7
  June 30, 2008
    
    
    December 31, 2007Gross
    
    
    
    
    
    
    GrossCarrying
    
    
    Accumulated
    
    
    Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationAmortized intangible assets:Customer lists
    
    $
    199.6
    
    
    $
    41.4
    
    
    $
    195.5
    
    
    $
    34.6Technology
    
    
    155.4
    
    
    
    60.9
    
    
    
    155.1
    
    
    
    55.1Trademarks
    
    
    25.1
    
    
    
    8.4
    
    
    
    23.6
    
    
    
    7.2Patents
    
    
    15.1
    
    
    
    6.5
    
    
    
    14.4
    
    
    
    5.7Land-use rights
    
    
    11.0
    
    
    
    1.7
    
    
    
    10.3
    
    
    
    1.5Non-compete agreements
    
    
    2.1
    
    
    
    1.2
    
    
    
    2.6
    
    
    
    1.0Total amortized intangible assets
    
    
    408.3
    
    
    
    120.1
    
    
    
    401.5
    
    
    
    105.1Non-amortized trademarks
    
    
    88.3
    
    
    
    
    
    
    
    84.9
    
    
    
    Total
    
    $
    496.6
    
    
    $
    120.1
    
    
    $
    486.4
    
    
    $
    105.1
  -12-




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##### 



THE LUBRIZOL CORPORATION  Notes to Consolidated Financial Statements  Three and Six Months Ended June 30, 2008 and 2007
 7. Comprehensive Income
  Three Months
    
    
    Six MonthsEnded June 30,
    
    

Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Net income
    
    $
    78.1
    
    
    $
    81.0
    
    
    $
    151.7
    
    
    $
    152.3Foreign currency translation adjustment
    
    
    (13.8
    )
    
    
    10.3
    
    
    
    62.4
    
    
    
    20.3Pension and other postretirement benefit plans
    
    
    0.2
    
    
    
    
    
    
    
    0.7
    
    
    
    Unrealized gain  natural gas hedges
    
    
    3.4
    
    
    
    (0.7
    )
    
    
    6.2
    
    
    
    0.8Amortization of treasury rate locks
    
    
    0.8
    
    
    
    0.8
    
    
    
    1.9
    
    
    
    1.5Total comprehensive income
    
    $
    68.7
    
    
    $
    91.4
    
    
    $
    222.9
    
    
    $
    174.9
 8. Segment Reporting
   ® ® ®
  -13-




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##### 



THE LUBRIZOL CORPORATION  Notes to Consolidated Financial Statements  Three and Six Months Ended June 30, 2008 and 2007
   Three Months
    
    
    Six MonthsEnded June 30,
    
    

Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Revenues from external customers:Lubrizol Additives
    
    $
    923.5
    
    
    $
    759.0
    
    
    $
    1,749.7
    
    
    $
    1,455.0Lubrizol Advanced Materials
    
    
    426.7
    
    
    
    395.6
    
    
    
    827.8
    
    
    
    776.3Total revenues
    
    $
    1,350.2
    
    
    $
    1,154.6
    
    
    $
    2,577.5
    
    
    $
    2,231.3Segment operating income:Lubrizol Additives
    
    $
    117.2
    
    
    $
    106.3
    
    
    $
    230.0
    
    
    $
    207.2Lubrizol Advanced Materials
    
    
    37.1
    
    
    
    43.5
    
    
    
    67.9
    
    
    
    88.9Segment operating income
    
    
    154.3
    
    
    
    149.8
    
    
    
    297.9
    
    
    
    296.1Corporate expenses
    
    
    (12.5
    )
    
    
    (17.6
    )
    
    
    (33.7
    )
    
    
    (39.3
    )Corporate other income (expense)-net
    
    
    0.5
    
    
    
    (0.9
    )
    
    
    3.7
    
    
    
    (1.4
    )Restructuring and impairment (charges) credits
    
    
    (14.6
    )
    
    
    (0.9
    )
    
    
    (19.4
    )
    
    
    1.5Interest expense-net
    
    
    (17.6
    )
    
    
    (17.5
    )
    
    
    (31.3
    )
    
    
    (34.6
    )Income before income taxes
    
    $
    110.1
    
    
    $
    112.9
    
    
    $
    217.2
    
    
    $
    222.3
  June 30,
    
    
    December 31,2008
    
    
    2007Segment total assets:Lubrizol Additives
    
    $
    1,841.4
    
    
    $
    1,663.4Lubrizol Advanced Materials
    
    
    2,328.5
    
    
    
    2,240.0Total segment assets
    
    
    4,169.9
    
    
    
    3,903.4Corporate assets
    
    
    645.3
    
    
    
    740.4Total consolidated assets
    
    $
    4,815.2
    
    
    $
    4,643.8
 -14-




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##### 



THE LUBRIZOL CORPORATION  Notes to Consolidated Financial Statements  Three and Six Months Ended June 30, 2008 and 2007
 9. Pension and Postretirement Benefits
  Three Months
    
    
    Six MonthsEnded June 30,
    
    

Ended June 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Pension benefits:Service cost - benefits earned during period
    
    $
    8.2
    
    
    $
    8.0
    
    
    $
    15.7
    
    
    $
    15.5Interest cost on projected benefit obligation
    
    
    11.2
    
    
    
    9.9
    
    
    
    22.2
    
    
    
    19.7Expected return on plan assets
    
    
    (9.2
    )
    
    
    (8.5
    )
    
    
    (19.0
    )
    
    
    (17.1
    )Amortization of prior service costs
    
    
    0.8
    
    
    
    0.7
    
    
    
    1.5
    
    
    
    1.4Recognized net actuarial loss
    
    
    0.9
    
    
    
    1.3
    
    
    
    1.6
    
    
    
    2.5Net periodic pension cost
    
    $
    11.9
    
    
    $
    11.4
    
    
    $
    22.0
    
    
    $
    22.0Other postretirement benefits:Service cost - benefits earned during period
    
    $
    0.4
    
    
    $
    0.4
    
    
    $
    0.9
    
    
    $
    0.8Interest cost on projected benefit obligation
    
    
    1.6
    
    
    
    1.5
    
    
    
    3.1
    
    
    
    2.9Amortization of prior service credits
    
    
    (1.7
    )
    
    
    (1.6
    )
    
    
    (3.4
    )
    
    
    (3.2
    )Amortization of initial net obligation
    
    
    0.2
    
    
    
    0.1
    
    
    
    0.3
    
    
    
    0.2Recognized net actuarial loss
    
    
    0.3
    
    
    
    0.3
    
    
    
    0.5
    
    
    
    0.6Settlement / curtailment gain
    
    
    
    
    
    
    
    
    
    
    (1.1
    )
    
    
    Net periodic non-pension postretirement
benefit cost
    
    $
    0.8
    
    
    $
    0.7
    
    
    $
    0.3
    
    
    $
    1.3
  10. Restructuring and Impairment Charges (Credits)
  -15-




---



##### 



THE LUBRIZOL CORPORATION  Notes to Consolidated Financial Statements  Three and Six Months Ended June 30, 2008 and 2007
   Liability
    
    
    Restructuring
    
    
    
    
    
    
    
    
    
    
    LiabilityJanuary 1,
    
    
    and Impairment
    
    
    
    
    
    
    Non-cash
    
    
    June 30,2008
    
    
    Charges
    
    
    Cash Paid
    
    
    Adjustments
    
    
    2008Performance Coatings 2008 business
improvement initiatives
    
    $
    
    
    
    $
    18.9
    
    
    $
    (2.2
    )
    
    $
    (14.4
    )
    
    $
    2.3Lubrizol Advanced Materials plant
closures and sale, production line
impairments and workforce reductions
    
    
    0.4
    
    
    
    0.5
    
    
    
    (0.3
    )
    
    
    (0.4
    )
    
    
    0.2Bromborough, U.K. plant closure and sale
    
    
    0.1
    
    
    
    
    
    
    
    
    
    
    
    (0.1
    )
    
    
    Noveon International, Inc. restructuring
liabilities assumed
    
    
    0.5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.5$
    1.0
    
    
    $
    19.4
    
    
    $
    (2.5
    )
    
    $
    (14.9
    )
    
    $
    3.0
   -16-




---



##### 



THE LUBRIZOL CORPORATION  Notes to Consolidated Financial Statements  Three and Six Months Ended June 30, 2008 and 2007
 11. Shareholders Equity
  Shareholders EquityAccumulatedNumber of
    
    
    
    
    
    
    
    
    
    
    OtherShares
    
    
    Common
    
    
    Retained
    
    
    ComprehensiveOutstanding
    
    
    Shares
    
    
    Earnings
    
    
    Income
    
    
    TotalBalance, January 1, 2008
    
    
    68.4
    
    
    $
    763.6
    
    
    $
    1,128.7
    
    
    $
    59.0
    
    
    $
    1,951.3Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    151.7
    
    
    
    
    
    
    
    151.7Other comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71.2
    
    
    
    71.2Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    222.9Dividends declared
    
    
    
    
    
    
    
    
    
    
    (42.1
    )
    
    
    
    
    
    
    (42.1
    )Deferred stock compensation
    
    
    
    
    
    
    (2.6
    )
    
    
    
    
    
    
    
    
    
    
    (2.6
    )Common
shares  treasury:Common shares purchased
    
    
    (0.9
    )
    
    
    (1.7
    )
    
    
    (48.4
    )
    
    
    
    
    
    
    (50.1
    )Shares issued upon exercise
of stock options and awards
    
    
    0.2
    
    
    
    5.0
    
    
    
    
    
    
    
    
    
    
    
    5.0Balance, June 30, 2008
    
    
    67.7
    
    
    $
    764.3
    
    
    $
    1,189.9
    
    
    $
    130.2
    
    
    $
    2,084.4
 12. Fair Value Measurements
   -17-




---



##### 



THE LUBRIZOL CORPORATION  Notes to Consolidated Financial Statements  Three and Six Months Ended June 30, 2008 and 2007
   Fair Value Measurements at Reporting Date UsingQuoted Prices
    
    
    Significant
    
    
    Significantin Active Markets
    
    
    Other
    
    
    UnobservableJune 30,
    
    
    for Identical Assets
    
    
    Observable Inputs
    
    
    Inputs2008
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Assets:Forward commodity contracts (1)
    
    $
    8.9


    
    $
    
    
    
    $
    8.9
    
    
    $
    Interest rate swaps (2)
    
    
    2.6
    
    
    
    
    
    
    
    2.6
    
    
    
    Total
    
    $
    11.5
    
    
    $
    
    
    
    $
    11.5
    
    
    $
    Liabilities:Deferred compensation plans (3)
    
    $
    20.4
    
    
    $
    20.4
    
    
    $
    
    
    
    $
    
 (1)
    
    The fair values of forward commodity contracts are based on counterparty quotes of market
forward rates and reflect the present value of the amount that the company would pay or receive for
contracts involving the same notional amounts and maturity dates.(2)
    
    The fair value of interest rate swaps is obtained from counterparty quotes, which use
discounted cash flows and the then-applicable forward interest rates.(3)
    
    The company allows directors and senior management to defer their fees, salary and incentive
compensation into a non-qualified deferred compensation plan, which is funded informally through
trust-owned life insurance held in a rabbi trust. Deferrals can be made into various cash
investment accounts and/or a share unit account. Changes in the value of compensation deferred
under these plans are recognized each period based on the fair value of the underlying investments,
including the companys common share price if amounts are held in a share unit account at the end
of the reporting period.
 13. Contingencies
  -18-




---



##### 



THE LUBRIZOL CORPORATION  Notes to Consolidated Financial Statements  Three and Six Months Ended June 30, 2008 and 2007
 General
  Environmental
     -19-




---



##### 



THE LUBRIZOL CORPORATION  Notes to Consolidated Financial Statements  Three and Six Months Ended June 30, 2008 and 2007
  Indemnifications
 
 -20-




---



##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  This Managements Discussion and Analysis of Financial Condition and Results of Operations should
be read in conjunction with the unaudited consolidated financial statements and the notes thereto
appearing elsewhere in this quarterly report on Form 10-Q . Historical results and percentage
relationships set forth in the consolidated financial statements, including trends that might
appear, should not be taken as indicative of future operations. The following discussion contains
forward-looking statements that involve risks and uncertainties. Our actual results may differ
materially from those discussed in such forward-looking statements as a result of various factors,
including those described under the section Cautionary Statements for Safe Harbor Purposes
included elsewhere in this quarterly report on Form 10-Q .
 OVERVIEW
     -21-




---



##### 



-22-




---



##### 



RESULTS OF OPERATIONS
 Three Months Ended June 30, 2008 Compared With Three Months Ended June 30, 2007
  Three MonthsEnded June 30,2008
    
    
    2007
    
    
    $ Change
    
    
    % ChangeRevenues
    
    $
    1,350.2
    
    
    $
    1,154.6
    
    
    $
    195.6
    
    
    
    17%Cost of sales
    
    
    1,044.7
    
    
    
    858.8
    
    
    
    185.9
    
    
    
    22%Gross profit
    
    
    305.5
    
    
    
    295.8
    
    
    
    9.7
    
    
    
    3%Selling and administrative expenses
    
    
    101.9
    
    
    
    103.4
    
    
    
    (1.5
    )
    
    
    (1%)Research, testing and development expenses
    
    
    55.7
    
    
    
    53.7
    
    
    
    2.0
    
    
    
    4%Amortization of intangible assets
    
    
    7.0
    
    
    
    5.9
    
    
    
    1.1
    
    
    
    19%Restructuring and impairment charges
    
    
    14.6
    
    
    
    0.9
    
    
    
    13.7
    
    
    
    *Other (income) expense-net
    
    
    (1.4
    )
    
    
    1.5
    
    
    
    (2.9
    )
    
    
    *Interest income
    
    
    (3.1
    )
    
    
    (6.9
    )
    
    
    3.8
    
    
    
    (55%)Interest expense
    
    
    20.7
    
    
    
    24.4
    
    
    
    (3.7
    )
    
    
    (15%)Income before income taxes
    
    
    110.1
    
    
    
    112.9
    
    
    
    (2.8
    )
    
    
    (2%)Provision for income taxes
    
    
    32.0
    
    
    
    31.9
    
    
    
    0.1
    
    
    
    Net income
    
    $
    78.1
    
    
    $
    81.0
    
    
    $
    (2.9
    )
    
    
    (4%)Net income per share, basic
    
    $
    1.14
    
    
    $
    1.17
    
    
    $
    (0.03
    )
    
    
    (3%)Net income per share, diluted
    
    $
    1.13
    
    
    $
    1.15
    
    
    $
    (0.02
    )
    
    
    (2%)
 *
    
    Calculation not meaningful
 Revenues
 -23-




---



##### 



Analysis
of Volume - 2008 vs. 2007
 Excluding2nd Quarter
    
    2nd Quarter
    
    the Impact of2008
    
    2008 vs. 2007
    
    AcquisitionsVolume
    
    % Change
    
    % ChangeNorth America
    
    
    42
    %
    
    
    (6
    %)
    
    
    (7
    %)Europe
    
    
    26
    %
    
    
    5
    %
    
    
    3
    %Asia-Pacific / Middle East
    
    
    25
    %
    
    
    25
    %
    
    
    23
    %Latin America
    
    
    7
    %
    
    
    26
    %
    
    
    24
    %Total
    
    
    100
    %
    
    
    5
    %
    
    
    4
    %
  Cost of Sales
 Gross Profit
 Selling and Administrative Expenses
 Research, Testing and Development Expenses
 Restructuring and Impairment Charges
 -24-




---



##### 



Three Months Ended June 30, 2008Asset
    
    
    Other PlantImpairments
    
    
    Exit Costs
    
    
    Severance
    
    
    TotalPerformance Coatings 2008 business improvement
initiatives
    
    $
    10.4
    
    
    $
    0.4
    
    
    $
    3.3
    
    
    $
    14.1Lubrizol Advanced Materials plant closures and
workforce reductions
    
    
    0.3
    
    
    
    
    
    
    
    0.2
    
    
    
    0.5Total restructuring and impairment charges
    
    $
    10.7
    
    
    $
    0.4
    
    
    $
    3.5
    
    
    $
    14.6
 Three Months Ended June 30, 2007Asset
    
    
    Other PlantImpairments
    
    
    Exit Costs
    
    
    Severance
    
    
    TotalLubrizol Advanced Materials plant closures and
workforce reductions
    
    $
    0.5
    
    
    $
    
    
    
    $
    0.3
    
    
    $
    0.8Bromborough, U.K. plant closure and sale
    
    
    
    
    
    
    0.1
    
    
    
    
    
    
    
    0.1Total restructuring and impairment charges
    
    $
    0.5
    
    
    $
    0.1
    
    
    $
    0.3
    
    
    $
    0.9
 Interest Income
 Interest Expense
 Provision for Income Taxes
 Net Income
 -25-




---



##### 



Six Months Ended June 30, 2008 Compared With Six Months Ended June 30, 2007
  Six MonthsEnded June 30,2008
    
    
    2007
    
    
    $ Change
    
    
    % ChangeRevenues
    
    $
    2,577.5
    
    
    $
    2,231.3
    
    
    $
    346.2
    
    
    
    16%Cost of sales
    
    
    1,979.2
    
    
    
    1,657.1
    
    
    
    322.1
    
    
    
    19%Gross profit
    
    
    598.3
    
    
    
    574.2
    
    
    
    24.1
    
    
    
    4%Selling and administrative expenses
    
    
    210.5
    
    
    
    205.7
    
    
    
    4.8
    
    
    
    2%Research, testing and development expenses
    
    
    109.8
    
    
    
    105.4
    
    
    
    4.4
    
    
    
    4%Amortization of intangible assets
    
    
    14.0
    
    
    
    11.9
    
    
    
    2.1
    
    
    
    18%Restructuring and impairment charges (credits)
    
    
    19.4
    
    
    
    (1.5
    )
    
    
    20.9
    
    
    
    *Other income-net
    
    
    (3.9
    )
    
    
    (4.2
    )
    
    
    0.3
    
    
    
    (7%)Interest income
    
    
    (7.3
    )
    
    
    (14.0
    )
    
    
    6.7
    
    
    
    (48%)Interest expense
    
    
    38.6
    
    
    
    48.6
    
    
    
    (10.0
    )
    
    
    (21%)Income before income taxes
    
    
    217.2
    
    
    
    222.3
    
    
    
    (5.1
    )
    
    
    (2%)Provision for income taxes
    
    
    65.5
    
    
    
    70.0
    
    
    
    (4.5
    )
    
    
    (6%)Net income
    
    $
    151.7
    
    
    $
    152.3
    
    
    $
    (0.6
    )
    
    
    Net income per share, basic
    
    $
    2.22
    
    
    $
    2.20
    
    
    $
    0.02
    
    
    
    1%Net income per share, diluted
    
    $
    2.19
    
    
    $
    2.17
    
    
    $
    0.02
    
    
    
    1%
 *
    
    Calculation not meaningful
 Revenues
 -26-




---



##### 



Analysis
of Volume - 2008 vs. 2007
 ExcludingYear-to-Date
    
    Year-to-Date
    
    the Impact of2008
    
    2008 vs. 2007
    
    AcquisitionsVolume
    
    % Change
    
    % ChangeNorth America
    
    
    43
    %
    
    
    (4
    %)
    
    
    (5
    %)Europe
    
    
    27
    %
    
    
    7
    %
    
    
    5
    %Asia-Pacific / Middle East
    
    
    23
    %
    
    
    19
    %
    
    
    17
    %Latin America
    
    
    7
    %
    
    
    27
    %
    
    
    26
    %Total
    
    
    100
    %
    
    
    6
    %
    
    
    4
    %
  Cost of Sales
 Gross Profit
 Selling and Administrative Expenses
 Research, Testing and Development Expenses
 Restructuring and Impairment Charges (Credits)
 -27-




---



##### 



Six Months Ended June 30, 2008Asset
    
    
    Other PlantImpairments
    
    
    Exit Costs
    
    
    Severance
    
    
    TotalPerformance Coatings 2008 business improvement
initiatives
    
    $
    14.4
    
    
    $
    0.4
    
    
    $
    4.1
    
    
    $
    18.9Lubrizol Advanced Materials plant closures and
workforce reductions
    
    
    0.3
    
    
    
    
    
    
    
    0.2
    
    
    
    0.5Total restructuring and impairment charges
    
    $
    14.7
    
    
    $
    0.4
    
    
    $
    4.3
    
    
    $
    19.4
 Six Months Ended June 30, 2007AssetImpairments
    
    
    Other Plant(Gains)
    
    
    Exit Costs
    
    
    Severance
    
    
    TotalLubrizol Advanced Materials plant closures and
workforce reductions
    
    $
    0.5
    
    
    $
    0.2
    
    
    $
    0.4
    
    
    $
    1.1Bromborough, U.K. plant closure and sale
    
    
    (2.8
    )
    
    
    0.1
    
    
    
    
    
    
    
    (2.7
    )Other
    
    
    
    
    
    
    
    
    
    
    0.1
    
    
    
    0.1Total restructuring and impairment (credits) charges
    
    $
    (2.3
    )
    
    $
    0.3
    
    
    $
    0.5
    
    
    $
    (1.5
    )
 Other Income-Net
 Interest Income
 Interest Expense
 Provision for Income Taxes
 Net Income
 -28-




---



##### 



SEGMENT ANALYSIS
   Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2008
    
    2007
    
    2008
    
    2007Revenues:Lubrizol Additives
    
    
    68
    %
    
    
    66
    %
    
    
    68
    %
    
    
    65
    %Lubrizol Advanced Materials
    
    
    32
    %
    
    
    34
    %
    
    
    32
    %
    
    
    35
    %Segment Operating Income:Lubrizol Additives
    
    
    76
    %
    
    
    71
    %
    
    
    77
    %
    
    
    70
    %Lubrizol Advanced Materials
    
    
    24
    %
    
    
    29
    %
    
    
    23
    %
    
    
    30
    %
  Three Months Ended
    
    
    
    
    
    
    
    
    
    
    Six Months EndedJune 30,
    
    
    
    
    
    
    %
    
    
    June 30,
    
    
    
    
    
    
    %2008
    
    
    2007
    
    
    $ Change
    
    
    Change
    
    
    2008
    
    
    2007
    
    
    $ Change
    
    
    ChangeRevenues:Lubrizol Additives
    
    $
    923.5
    
    
    $
    759.0
    
    
    $
    164.5
    
    
    
    22%
    
    
    $
    1,749.7
    
    
    $
    1,455.0
    
    
    $
    294.7
    
    
    
    20%Lubrizol Advanced Materials
    
    
    426.7
    
    
    
    395.6
    
    
    
    31.1
    
    
    
    8%
    
    
    
    827.8
    
    
    
    776.3
    
    
    
    51.5
    
    
    
    7%Total
    
    $
    1,350.2
    
    
    $
    1,154.6
    
    
    $
    195.6
    
    
    
    17%
    
    
    $
    2,577.5
    
    
    $
    2,231.3
    
    
    $
    346.2
    
    
    
    16%Gross Profit:Lubrizol Additives
    
    $
    195.9
    
    
    $
    186.4
    
    
    $
    9.5
    
    
    
    5%
    
    
    $
    386.1
    
    
    $
    354.5
    
    
    $
    31.6
    
    
    
    9%Lubrizol Advanced Materials
    
    
    109.6
    
    
    
    109.4
    
    
    
    0.2
    
    
    
    
    
    
    
    212.2
    
    
    
    219.7
    
    
    
    (7.5
    )
    
    
    (3%)Total
    
    $
    305.5
    
    
    $
    295.8
    
    
    $
    9.7
    
    
    
    3%
    
    
    $
    598.3
    
    
    $
    574.2
    
    
    $
    24.1
    
    
    
    4%Segment Operating Income:Lubrizol Additives
    
    $
    117.2
    
    
    $
    106.3
    
    
    $
    10.9
    
    
    
    10%
    
    
    $
    230.0
    
    
    $
    207.2
    
    
    $
    22.8
    
    
    
    11%Lubrizol Advanced Materials
    
    
    37.1
    
    
    
    43.5
    
    
    
    (6.4
    )
    
    
    (15%)
    
    
    
    67.9
    
    
    
    88.9
    
    
    
    (21.0
    )
    
    
    (24%)Total
    
    $
    154.3
    
    
    $
    149.8
    
    
    $
    4.5
    
    
    
    3%
    
    
    $
    297.9
    
    
    $
    296.1
    
    
    $
    1.8
    
    
    
    1%
 -29-




---



##### 



Three Months Ended June 30, 2008 Compared With Three Months Ended June 30, 2007
 Lubrizol Additives Segment
 Revenues
  Excluding2nd Quarter
    
    2nd Quarter
    
    the Impact of2008
    
    2008 vs. 2007
    
    AcquisitionsVolume
    
    % Change
    
    % ChangeNorth America
    
    
    32
    %
    
    
    (6
    %)
    
    
    (8
    %)Europe
    
    
    31
    %
    
    
    9
    %
    
    
    6
    %Asia-Pacific / Middle East
    
    
    29
    %
    
    
    26
    %
    
    
    24
    %Latin America
    
    
    8
    %
    
    
    30
    %
    
    
    28
    %Total
    
    
    100
    %
    
    
    9
    %
    
    
    7
    %
  Gross Profit
  Selling, Technical, Administrative and Research Expenses
 -30-




---



##### 



Other Expense-Net
 Segment Operating Income
 Lubrizol advanced materials Segment
 Revenues
  2nd Quarter
    
    2nd Quarter2008
    
    2008 vs. 2007Volume
    
    % ChangeNorth America
    
    
    65
    %
    
    
    (7
    %)Europe
    
    
    17
    %
    
    
    (7
    %)Asia-Pacific / Middle East
    
    
    14
    %
    
    
    20
    %Latin America
    
    
    4
    %
    
    
    9
    %Total
    
    
    100
    %
    
    
    (3
    %)
 ® ® ® ®
 
 -31-




---



##### 



Gross Profit
  Selling, Technical, Administrative and Research Expenses
 Segment Operating Income
 Six Months Ended June 30, 2008 Compared With Six Months Ended June 30, 2007
 Lubrizol Additives Segment
 Revenues
 -32-




---



##### 



ExcludingYear-to-Date
    
    Year-to-Date
    
    the Impact of2008
    
    2008 vs. 2007
    
    AcquisitionsVolume
    
    % Change
    
    % ChangeNorth America
    
    
    33
    %
    
    
    (2
    %)
    
    
    (5
    %)Europe
    
    
    31
    %
    
    
    11
    %
    
    
    8
    %Asia-Pacific / Middle East
    
    
    28
    %
    
    
    19
    %
    
    
    17
    %Latin America
    
    
    8
    %
    
    
    32
    %
    
    
    31
    %Total
    
    
    100
    %
    
    
    9
    %
    
    
    7
    %
  Gross Profit
  Selling, Technical, Administrative and Research Expenses
 Other (Income) Expense-Net
 Segment Operating Income
 -33-




---



##### 



Lubrizol advanced materials Segment
 Revenues
  Year-to-Date
    
    Year-to-Date2008
    
    2008 vs. 2007Volume
    
    % ChangeNorth America
    
    
    66
    %
    
    
    (5
    %)Europe
    
    
    17
    %
    
    
    (7
    %)Asia-Pacific / Middle East
    
    
    13
    %
    
    
    16
    %Latin America
    
    
    4
    %
    
    
    7
    %Total
    
    
    100
    %
    
    
    (3
    %)
  
   Gross Profit
 -34-




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Selling, Technical, Administrative and Research Expenses
 Segment Operating Income
 WORKING CAPITAL, LIQUIDITY AND CAPITAL RESOURCES
  Six Months EndedJune 30,2008
    
    
    2007Cash provided by (used for):Operating activities
    
    $
    95.5
    
    
    $
    227.2Investing activities
    
    
    (96.4
    )
    
    
    (80.7
    )Financing activities
    
    
    (86.7
    )
    
    
    (133.1
    )Effect of exchange-rate changes on cash
    
    
    5.4
    
    
    
    3.5Net (decrease) increase in cash and short-term
investments
    
    $
    (82.2
    )
    
    $
    16.9
 Operating Activities
   -35-




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Investing Activities
  Financing Activities
  
  Capitalization, Liquidity and Credit Facilities
     
  Contractual Cash Obligations
  -36-




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##### 




 NEW ACCOUNTING STANDARDS
    -37-




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##### 



-38-




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##### 



CAUTIONARY STATEMENTS FOR SAFE HARBOR PURPOSES
   
    
    The cost, availability and quality of raw materials, especially petroleum-based products.
    
    Our ability to sustain profitability of our products in a competitive environment.
    
    The demand for our products as influenced by factors such as the global economic environment,
longer-term technology developments and the success of our commercial development programs.
    
    The risks of conducting business in foreign countries, including the effects of fluctuations
in currency exchange rates upon our consolidated results and political, social, economic and
regulatory factors.
    
    The extent to which we are successful in expanding our business in new and existing markets
and in identifying, understanding and managing the risks inherent in those markets.
    
    The effects of required principal and interest payments and the high degree of volatility in
the capital markets on our ability to fund capital expenditures and acquisitions and to meet
operating needs.
    
    Our ability to identify, complete and integrate acquisitions for profitable growth and
operating efficiencies.
    
    Our success at continuing to develop proprietary technology to meet or exceed new industry
performance standards and individual customer expectations.
    
    Our ability to implement a new common information systems platform primarily into our
Lubrizol Advanced Materials segment successfully, including the management of project costs,
its timely completion and realization of its benefits.
    
    Our ability to continue to reduce complexities and conversion costs and modify our cost
structure to maintain and enhance our competitiveness.
 -39-




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
    
    Our success in retaining and growing the business that we have with our largest customers.
    
    The cost and availability of energy, especially natural gas and electricity.
    
    The effect of interest rate fluctuations on our net interest expense.
    
    The risk of weather-related disruptions to our Lubrizol Additives production facilities
located near the U.S. Gulf Coast.
    
    Significant changes in government regulations affecting environmental compliance.
 
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
      -40-




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Item 4. Controls and Procedures
    
 PART II. OTHER INFORMATION
 
 Item 1A. Risk Factors
  -41-




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##### 



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 (a)
    
    On April 1, 2008, we issued 605 common shares in private placement transactions
exempt from registration under Section 4(2) of the Securities Act of 1933 (the
Securities Act). We issued the common shares to one participant under the executive
council deferred compensation plan, one former director under a deferred stock
compensation plan for directors and one former officer under a senior management
deferred compensation plan.On May 1, 2008, we issued 7,323 common shares in private placement transactions
exempt from registration under Section 4(2) of the Securities Act. We issued the
common shares to two former directors under a deferred stock compensation plan for
directors and to two former employees under a senior management deferred compensation
plan.On May 14, 2008, we issued two common shares in a transaction exempt from
registration under Regulation S of the Securities Act. We issued the common shares
to one employee of a wholly owned United Kingdom subsidiary of the company under an
employee benefit plan.On June 2, 2008, we issued 11 common shares in a private placement transaction exempt
from registration under Section 4(2) of the Securities Act. We issued the common
 shares to one former officer under a senior management deferred compensation plan.
 -42-




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##### 



(c)
    
    The following table provides information regarding our purchases of Lubrizol
common shares during the quarter.
 Total Numberof Shares Purchased
    
    Maximum Numberas Part of Publicly
    
    of Shares that May Yet beTotal Number of
    
    Average Price
    
    Announced Plans
    
    Purchased Under thePeriod
    
    Shares Purchased1
    
    Paid per Share
    
    or Programs2
    
    Plans or ProgramsApril 1, 2008 through
April 30, 2008
    
    
    123
    
    
    $
    55.51
    
    
    
    0
    
    
    
    4,681,918May 1, 2008 through
May 31, 2008
    
    
    451,740
    
    
    $
    55.51
    
    
    
    451,000
    
    
    
    4,230,918June 1, 2008 through
June 30, 2008
    
    
    4
    
    
    $
    56.10
    
    
    
    0
    
    
    
    4,230,918Total
    
    
    451,867
    
    
    
    
    
    
    
    451,000
    
    
    
    4,230,918
 
 1
    
    This column includes common shares (123 in April; 740 in May; and 4 in
June) that we purchased pursuant to our deferred compensation plans, whereby we withhold
shares upon a distribution to pay the withholding taxes on behalf of the employee.2
    
    This column represents common shares that we purchased at a cost of $25.1
million pursuant to a previously announced share repurchase plan authorized by the board of directors on
April 23, 2007. Under this plan, we can repurchase up to five million shares, which will be effected through
open market purchases or in negotiated transactions. This plan will expire when we repurchase all of the shares authorized
under the plan. On June 23, 1997, our board of directors authorized the repurchase of up to four million common
shares, all of which have been repurchased. These plans are a part of our program to repurchase up to $300.0 million common
shares from 2007 through 2009. 
 Item 4. Submission of Matters to a Vote of Security Holders
   a.
    
    Robert E. Abernathy. The vote was 59,762,238 shares for and 2,795,632
shares to withhold authority.b.
    
    Dominic J. Pileggi. The vote was 60,105,665 shares for and 2,452,205
shares to withhold authority.c.
    
    Harriett Tee Taggart. The vote was 61,677,941 shares for and 879,929
shares to withhold authority.
  -43-




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##### 



2.
    
    A proposal to confirm the appointment of Deloitte & Touche LLP as the independent
registered public accountant. The vote was 61,929,370 shares for; 512,534 shares against;
and 115,965 shares abstaining.3.
    
    A shareholder proposal requesting the necessary steps to cause the annual election of
all directors. The vote was 46,720,006 shares for; 6,614,323 shares against; and 3,311,873
shares abstaining.
 
 Item 6. Exhibits
 3.1
    
    Amended Articles of Incorporation of The Lubrizol Corporation, as adopted
September 23, 1991 (incorporated by reference to Exhibit 3.1 to The Lubrizol
Corporations annual report on Form 10-K for the year ended December 31, 2004).3.2
    
    Regulations of The Lubrizol Corporation, as amended effective April 27, 1992
(incorporated by reference to Exhibit 3.2 to The Lubrizol Corporations annual report
on Form 10-K for the year ended December 31, 2004).3.3
    
    Amendment to Article Fourth of Amended Articles of Incorporation (incorporated
by reference to Exhibit 4.1 to The Lubrizol Corporations annual report on Form 10-K
for the year ended December 31, 2004).31.1
    
    Rule 13a-14(a) Certification of the Chief Executive Officer, as created by
Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Rule 13a-14(a) Certification of the Chief Financial Officer, as created by
Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Chief Executive Officer and Chief Financial Officer of The
Lubrizol Corporation pursuant to 18 U.S.C. Section 1350, as created by Section 906 of
the Sarbanes-Oxley Act.
 
 Signatures
  THE LUBRIZOL CORPORATION/s/ W. Scott EmerickW. Scott EmerickChief Accounting Officer and Duly Authorized
Signatory of The Lubrizol Corporation  -44-